China has recently eased controls on some indium phosphide (InP) substrates, relieving a bottleneck in optical communications capacity for the second half of the year. But supply chain players say the long-term priority is still to expand substrate capacity from non-China sources, with supply security for the AI industry outweighing price.

A South Korean media report claiming TSMC is preparing to launch panel-level packaging at mass-production scale as early as 2027 has drawn skepticism from Taiwan industry sources, who say the timeline is likely premature and that the company remains focused on evaluating multiple advanced-packaging options.

The semiconductor supply chain is facing another raw material shock — this time from tungsten hexafluoride, or WF6, a specialty gas used in chip manufacturing. Planned production adjustments or exits by some Japanese suppliers in the second half of 2026 have intensified concerns over tighter global supply, sending prices sharply higher and raising the risk of disruption into 2027.

Japan's Rapidus has signed a memorandum of understanding with the UK Semiconductor Centre, a government-backed body established in 2025 to support Britain's semiconductor ecosystem, marking a step toward cooperation on future semiconductor manufacturing and potential customer development in the UK, according to Rapidus and reports from Nikkei, Bloomberg, and Reuters.

Physical AI is emerging as a new frontier of model development. Any model, however, is only as good as the data used to train it. Because of this, Japanese startup APTO is launching a physical AI infrastructure lab to help plug the data gap needed to create vision-language-action (VLA) models, with a focus on imitation learning.

Galatek Technologies has opened a manufacturing, assembly, and delivery center in Penang, marking the AI-enabled automation and semiconductor equipment supplier's first manufacturing site in Malaysia.

European luxury automakers are pulling back from China's plug-in hybrid vehicle (PHEV) market after Beijing tightened eligibility requirements for new-energy vehicle incentives starting in 2026. The policy raised the minimum all-electric range for tax incentives from 43 kilometers to 100 kilometers. The threshold sidelined many European PHEV models and prompted a shift in market strategy, according to executives and foreign media reports.

The Supreme People's Court in China rejected Infineon's reconsideration request on June 12, 2026, upholding a Suzhou Intermediate People's Court injunction that found Infineon had infringed two of InnoScience's core GaN invention patents. The ruling bars the affected products from being sold, imported, or offered for sale in China, and awards InnoScience approximately NT$45 million (US$1.4 million) in damages.