Taiwan’s Economy Is Soaring As a Result of The AI Boom. Its President Will Give Cash To Residents.

Taiwan President Lai Ching-te announced a cash dividend to citizens next year, claiming it's a result of the economy's sustained growth.

Concretely, he announced plans to distribute NT$10,000, or more than $300, as part of the government's budget plan that will be unveiled on Thursday.

Bloomberg detailed that the country's economy expanded almost 13% in the second quarter, and could see the fastest full-year growth in four decades due to investment in the island's semiconductor industry. The statistics bureau raised its growth forecast for more than 11% for the year. Should the figure be confirmed, it would be the fastest expansion in 39 years.

The stock market has gained almost 60%. Taiwan had already distributed the same sum in 2025 after the country expanded 8.8%.

"The government will not only concentrate on the technology industry but also care for every family striving to make a living," Lai said when announcing the decision.

A large part of the growth comes from Taiwan Semiconductor Manufacturing Co., which reported a nearly 45% surge in July sales as demand for artificial intelligence chips continued to fuel growth at the world's largest contract chipmaker.

The Taiwanese company manufactures advanced chips designed by customers including Nvidia and Google, putting it in a prime position to benefit as technology companies compete for the computing power needed for AI.

"TSMC is now guiding for 40% growth in revenues for this year, so July's numbers put it ahead of that figure," Ben Barringer, head of technology research at Quilter Cheviot, told CNBC.

Barringer cautioned against reading too much into a single month's figures because semiconductor demand can shift quickly, but said the latest numbers show demand remains strong for now.

TSMC's second-quarter results last month provided further evidence of that momentum.

The company generated $40.2 billion in second-quarter revenue, up 33.7% from a year earlier, while net income climbed 77.4%, according to TSMC's earnings release. Advanced technologies accounted for 77% of total wafer revenue during the quarter.

High-performance computing, the segment that includes TSMC's AI chip business, accounted for 66% of revenue during the period.

TSMC now expects its 2026 revenue to increase by slightly more than 40% in U.S. dollar terms and has raised its planned capital expenditure for the year to between $60 billion and $64 billion.

For the third quarter, the company expects revenue of between $44.6 billion and $45.8 billion, according to its latest guidance.