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The durability of the current economic expansion hinges on three key considerations, said MAS.\u00a0<\/span><\/p>\n The first is the sustainability of the AI-driven global investment cycle. On this point, indicators constructed by the central bank\u2019s economic policy group suggest that strong semiconductor production growth has persisted despite\u00a0<\/span>financial\u00a0pressure on hyperscalers.<\/span><\/p>\n \u201cWhile this points to rising downside risks, current strains remain short of levels that would suggest an imminent retrenchment in AI investment,\u201d said MAS.<\/span><\/p>\n Even if capital expenditure is affected by financial vulnerabilities, there are substantial order backlogs and capacity expansions that have been committed to, which would cushion the near-term impact on production.<\/span><\/p>\n Industry forecasts for chip sales growth, together with increases in new orders, suggest that the AI-led semiconductor cycle is more likely to remain in a phase of expansion, said MAS.<\/span><\/p>\n The second consideration affecting the durability of Singapore\u2019s current economic expansion is whether capacity constraints in the technology-related sectors will constrain the pace of further\u00a0<\/span>growth.<\/span><\/p>\n The central bank noted that significant additions are expected to come online in 2027 and 2028.\u00a0<\/span><\/p>\n For example, Micron has embarked on multi-year investments, while GlobalFoundries and UMC are ramping up capacity.<\/span><\/p>\n