Goldman Sachs: AI Chip Boom to Push Up Rate Hike Expectations in Taiwan and Korea

According to a Bloomberg report, Goldman Sachs economists led by Andrew Tilton assessed in a report on May 11th that the prosperity of chip exports driven by artificial intelligence is increasing the trade surplus of South Korea and Taiwan, China, and putting pressure on monetary policy to tighten within the year.

Goldman Sachs currently forecasts that South Korea will tighten rates by 25 basis points in both the third and fourth quarters, while Taiwan, China, will increase rates by 12.5 basis points in the second and fourth quarters.

The key driver behind this assessment is the rapid rise of AI-related exports in the economies of both regions. Goldman Sachs estimates that South Korea's AI-related exports may reach nearly 30% of GDP this year, and Taiwan, China's related exports proportion could further exceed 30%.

A export boom does not necessarily mean an overall economic warming. Goldman Sachs points out that non-tech exports may continue to slump due to regional overcapacity and energy shocks, with the growth structure resembling a K-shaped cycle where a few tech chains move up rapidly while other sectors lag behind.

Goldman Sachs wrote in the report, “The K-shaped cycle calls for targeted, prudent fiscal policy.” In other words, rate pressures come from external surpluses and exchange rate changes, while fiscal policy needs to address the internal imbalances caused by growth divergence.

Within this framework, Goldman Sachs forecasts that a surge in tech exports will drive South Korea's current account surplus to over 10% of GDP in 2026, and Taiwan, China, will exceed 20% of GDP. Growth forecasts have also been revised upward, with South Korea's GDP growth expected to rebound from 1% in 2025 to 2.5% this year, and Taiwan, China, will accelerate from last year's 8.7% to nearly 10% in 2026.