Tariffs, inflation, and geopolitical risk continue to cloud the global economy, while the smartphone industry faces fresh pressure from higher upstream material costs and component shortages. As 2026 approaches, several structural issues are set to define the market's direction.

Infineon is leveraging its technological strengths to expand into cutting-edge applications in AI data centers and robotics. The company is currently collaborating with Nvidia to develop power systems for next-generation AI racks, featuring direct current (DC) voltages up to 800V.

Global high-performance transmission cable maker Wonderful Hi Tech offered an optimistic outlook at its investor briefing on November 18, 2025. Despite a slight year-over-year revenue decline in the third quarter of 2025—attributed to the end of pre-stockpiling by clients ahead of tariff changes—company executives said the inventory adjustment is expected to conclude by year-end, setting the stage for a robust start to 2026. With continued growth in AI and low-Earth-orbit (LEO) satellite markets, the company anticipates 2026 will be a high-growth year.

The surge in AI-driven high-speed computing and data transmission demands has prompted major players to invest heavily in co-packaged optics (CPO) technology. Compound semiconductor firm IntelliEPI announced a share-swap partnership with optical communications company EZconn, drawing renewed market attention.

As generative AI and large language models scale rapidly, the computing race is shifting toward a quieter but decisive battleground: how data is stored, accessed, and utilized. According to Sina and Securities Times, Huawei has launched a global call for solutions through the sixth OlympusMons Awards, which opened on December 26, 2025. With a total prize pool of CNY3 million (US$426,000), the program seeks innovations aimed at overcoming storage and memory bottlenecks in the AI era.

After briefly approaching a US$5 trillion market capitalisation, Nvidia spent 2025 deploying capital at an unprecedented pace, backing Groq, OpenAI, Nokia, Synopsys, and Intel through technology deals, equity stakes, and strategic partnerships. The objective is straightforward: convert AI-driven cash inflows into a durable, structural influence across the AI ecosystem.

The global unmanned vehicle market is booming with explosive growth. This surge has revitalized existing sectors while boosting related supply chains that are now targeting a second growth curve. Key component suppliers, such as those from the communication technology and IC design sector,s are seizing new business opportunities.

Foxconn's operating structure is clearly shifting. Previously driven mainly by consumer electronics cycles, it is now gradually tilting toward AI servers, cloud, AI infrastructure, and high-performance computing (HPC). With continued investment and deployment in emerging businesses such as electric vehicles (EVs), results are expected to surface in 2026.

According to Nikkei, although electric vehicle (EV) demand has been below expectations, weighing heavily on Rohm Semiconductor's SiC power semiconductor equipment investments, the company has decided to expand applications into the AI server sector. Rohm's annual revenue from server-related fields is only around JPY10 billion (approx. US$64 million), but it has already started supplying new products in collaboration with Nvidia.

Data centers are entering a new phase of infrastructure upgrades in 2026, feeding off generative AI under Nvidia's leadership. While silicon photonics (SiPh) and co-packaged optics (CPO) technologies are still in the deployment stage, the optical communications industry is expected to move into commercialization by 2026.

China has released draft rules to regulate human-like artificial intelligence interaction services, marking a significant step toward governing AI companions, virtual personas, and emotionally responsive systems as authorities seek to balance innovation with social stability and user protection.

In 2025, the global electronics supply chain transformed due to rising demand for artificial intelligence (AI) and high-performance computing (HPC), boosting servers, chips, and cooling sectors. Geopolitical tensions, export controls, and multi-location approaches also reshaped the supply chain to improve flexibility and risk management. The DIGITIMES Asia news team has summarized the top 10 key developments from this shift.

The development paths for artificial intelligence (AI) integration in smartphones are diverging as ByteDance extends its collaborations with multiple brands, while technology giants Apple Inc. and Alphabet maintain a standardized application programming interface (API) strategy. Following the December 2025 launch of the Doubao phone M153 in partnership with ZTE Corporation's Nubia, recent reports indicate that ByteDance is broadening its AI smartphone alliances to include Vivo, Lenovo Group, and Transsion.

Market attention in the modern AI computing power competitive landscape has mainly focused on semiconductor chip upgrades. But according to Chih-Ming Lin, chairman of Tatun Electric, the real challenge lies elsewhere. The company, with more than 70 years of industry experience, believes AI will not turn into a bubble—provided power transmission issues are effectively resolved.

Demand for green talent in Taiwan has surged to unprecedented levels. The pending implementation of carbon fees, continued growth in the green technology sector, and rising demands for net-zero emissions in global supply chains have created a massive workforce gap. Statistics show that Taiwan's green workforce shortfall neared 30,000 in 2025, marking a new record high at nearly 300% the level eight years ago. The electronics, IT, and semiconductor industries show the strongest hiring needs. AI skills have also become highly sought after, with employers favoring expertise in software engineering and R&D.

Google is advancing its TorchTPU initiative to optimize PyTorch performance on its proprietary TPU chips, as reported by Reuters. This effort, undertaken in collaboration with Meta Platforms Inc., aims to reduce developers' switching costs and disrupt Nvidia Corporation's leading position in AI infrastructure.

Global management consulting firm McKinsey & Company has released its "Global Banking Annual Review" and "The State of AI: Global Survey 2025," based on a survey of 2,000 companies across finance, technology, retail, and other sectors.

As generative AI advances, applications are shifting from simple content creation to autonomous action. AI agents have become central, focusing on understanding goals, making independent decisions, and completing tasks with minimal human input. This marks AI's evolution from a tool to an intelligent system that works autonomously.

Apple Inc. has unveiled an AI imaging technology called DarkDiff, designed to improve photo clarity in low-light conditions by integrating generative diffusion models into the camera's image signal processor (ISP). While effective in reducing blur and enhancing detail, the technology's high computational demands currently limit its deployment on consumer devices.

OpenAI launched its AI browser, ChatGPT Atlas, allowing AI agents to access web pages and assist users with tasks such as editing emails. However, this innovation comes with heightened cybersecurity threats from prompt injection attacks, which OpenAI concedes are challenging to fully eradicate.

Huawei is clarifying how it intends to compete in global AI computing despite being cut off from leading-edge foundries and US-origin GPUs. Instead of chasing rivals on single-chip performance, the company is leaning into scale, systems engineering, and vertical integration—a strategy it is now preparing to test outside China, beginning with South Korea.

The space industry is undergoing a profound transformation. What was once the domain of government agencies has become a strategic battleground. Commercial innovation, military priorities, and economic competition now converge beyond Earth's atmosphere.

As 2025 draws to a close, the US-China AI compute market is entering a phase of guarded competition and selective cooperation. While the US government has launched an inter-agency review of Nvidia's H200 exports to China—and Nvidia is reportedly planning deliveries ahead of the Lunar New Year—Huawei has already set a clear timetable. Its next-generation AI chip, the Ascend 950PR, is scheduled for release in the first quarter of 2026.

Nvidia is set to include innovations from Groq, an AI inference chip startup, into its product ecosystem by the end of 2025, responding to an expected surge in AI inference demand. CEO Jensen Huang estimated in early 2025 that AI inference workload could grow by up to one billion times in the coming years, driving the company's strategic pivot.

McKinsey Taipei recently released its "Global Banking Annual Review 2025" and "The State of AI: Global Survey 2025," surveying 2,000 companies across finance, technology, and retail sectors worldwide. Senior adviser Victor Kuan and senior partner Violet Chung at McKinsey & Company noted that Taiwan's financial industry faces multiple pressures from geopolitical tensions, macroeconomic volatility, and intensifying competition.