Booming demand for artificial intelligence (AI) servers has fueled strong momentum for electronic manufacturing services (EMS) firms, with the surge also reflected in capital markets. However, performance has varied widely among companies. Pegatron chairman TH Tung said that his company's efforts over the past two to three years will pay off with triple-digit growth in 2026. He described the AI industry as entering a phase of aggressive expansion and expressed optimism that 2026 will be a year of unstoppable momentum.
Tung said that many firms once regarded as model companies have experienced ups and downs over the past decade. He attributed these fluctuations mainly to two factors: internal efforts and industry constraints. When shifts in the broader macro environment are difficult to anticipate, they are less likely to be immediately reflected in earnings. Conversely, when demand does emerge, capacity adjustments cannot happen overnight to keep pace.
AI servers to drive growth
Tung emphasized that Pegatron's efforts over the past three years will not be wasted, and that AI servers are expected to deliver solid results in 2026. As the industry enters a phase of rapid market expansion, the company's relatively low base in 2025 sets the stage for unstoppable momentum this year. He noted that achieving fast yet stable growth requires sustained internal effort. Transforming talent resources and organizational structure are not easy tasks and often involve hundreds of billions of New Taiwan dollars, with any misstep potentially having significant consequences.
No concern of an AI bubble
Amid the surge in AI demand, some voices have raised concerns over a potential bubble. Tung cited Quanta Computer chairman Barry Lam's optimistic outlook that AI momentum will stay strong for several more years. He attributed his own positive view to two key factors: ongoing infrastructure deployments and emerging applications. He added that any industry that fails to develop applications will fail.
Using the internet boom in 2000 as an example, Tung noted that despite some missteps along the way, such as failed early attempts to use Bluetooth for streaming music, these small bubbles did not prevent the internet from becoming a pillar of modern technology. He expects AI to follow a similar path, becoming an indispensable piece of modern technological infrastructure.
As that foundation takes shape, Tung said applications will naturally emerge, significantly boosting the productivity of digital devices. Devices that fail to integrate AI capabilities will inevitably fall behind. The development of more applications will necessitate further infrastructure expansion, creating a positive feedback loop. For these reasons, he is not concerned about an AI bubble, believing instead that the AI era is only just beginning.
Pegatron held its annual year-end party at Nangang Exhibition Center in Taipei, Taiwan, on January 23, 2026, hosting 800 tables and featuring a lineup of award-winning performers. This year's total prize pool reached NT$160 million (US$5.1 million), with the grand prize being a Tesla Model Y.
Article edited by Jerry Chen
