AI-driven growth: Taiwan’s economy grew 12.9% in Q2 2026, with exports up 21.6% as AI demand keeps pulling through semiconductors and data-center supply chains. Chip supply momentum: MediaTek’s board approved a $5B discretionary financing plan to expand into AI data-center custom chips (ASICs), aiming for production starts later this year and ramping through 2028. Market whiplash, then rebound: After a brutal AI-stock sell-off, Taiwan’s Taiex surged with its biggest closing point gain on record, helped by strong earnings from tech heavyweights; regional markets also bounced. Local defense procurement politics: Taiwan’s lawmakers deadlocked over a drone bill that would fund large-scale local drone and unmanned surface vessel procurement, with budget size and oversight approach still contested. Cross-strait maritime autonomy: Shield AI and Thunder Tiger completed a maritime teaming demo in Taiwan, highlighting practical autonomy for sea operations. Food safety crackdown: A second camellia oil maker was ordered to halt operations after carcinogen benzo[a]pyrene exceeded legal limits, with raw-material sourcing under scrutiny. Taiwan-Japan ties after quake: Support for Kumamoto poured in from Taiwan, including donations from Taiwan’s government and major firms tied to the region. Industry leadership change: PSMC chairman Frank Huang died at 76; the company said operations will continue as planned. Geopolitics backdrop: U.S. officials again stressed avoiding a U.S.-China war “at all costs,” while Japan moved further on defense export liberalization.