With strong demand for AI servers, TSMC—holding the vast majority of AI chip orders—is executing major expansions in advanced process technology and packaging capacity. As TSMC and Nvidia light the way for AI development, related semiconductor and electronics suppliers across Taiwan are investing heavily to boost production capabilities in response to surging orders.

Taiwan's finance minister and central bank governor have welcomed the US promise to extend most-favored-nation treatment under Section 232 tariffs, calling it a strong endorsement of Taiwan's industries in the trade negotiations between the two countries.

The removal of US tariffs on Taiwan's machine tools has leveled the playing field with major competitors Japan and South Korea, offering some relief to the industry. However, while this short-term resolution eases concerns, long-term challenges such as exchange rate fluctuations remain unresolved. Even as market doubts fade and demand shows signs of recovery, Taiwanese manufacturers cannot afford complacency.

Taiwan's information and communications technology (ICT) sector—dominated by the semiconductor industry and Electronics Manufacturing Services (EMS)—accounted for 65.2% of Taiwan's exports in 2024. This share is projected to rise to roughly 74% in 2025, reflecting the island's unique position in global industrial competition and underscoring profound implications for the country's future industrial trajectory.

India and the EU have finalized negotiations on a landmark free trade agreement (FTA), a move hailed as historic by both sides as they navigate strained relations with the US and global trade volatility, Reuters reported on January 26, 2026. The pact, expected to be announced on January 27, 2026, at the India-EU Summit in New Delhi, opens the door for free trade of goods between India and the 27-nation EU bloc, which together represent roughly a quarter of the world's GDP and a market of 2 billion consumers.

Sanmina announced a robust start to fiscal year 2026, reporting a 59% year-over-year increase in revenue for its first quarter ended December 27, 2025. The company's performance was significantly bolstered by the integration of ZT Systems and a surge in demand across the communications networks, cloud, and AI infrastructure end markets. Management expressed high confidence in the company's trajectory, aiming to double total revenue over the next two years primarily through massive opportunities in the artificial intelligence sector.

Taiwan's electricity demand is entering a new phase of sustained growth, driven by AI, semiconductors, and high-tech manufacturing. While the government accelerates grid resilience efforts, global shortages of critical power equipment—especially gas turbines and transformers—are inflating costs, delaying projects, and reshaping how the island plans its power future.

US Secretary of the Treasury Scott Bessent highlighted at the World Economic Forum (WEF) in Switzerland that 97% of advanced chips are produced in Taiwan, warning that any blockade or destruction of Taiwan would trigger "apocalyptic" economic consequences. Taiwanese government officials emphasize the island's critical role in miniaturizing and commercializing quantum computers, actively inviting international partners to collaborate. Taiwan plans to overcome noisy intermediate-scale quantum (NISQ) and wiring bottlenecks within five years, transitioning quantum computing from laboratory components to industrial-grade systems.

T-Head Semiconductor, a subsidiary of Alibaba, is reportedly preparing for an initial public offering (IPO), signaling a new growth phase for China's domestic AI chip sector. Industry sources in the semiconductor supply chain note that T-Head has already achieved stable shipments of certain edge AI chips, while its cloud AI chips are primarily used internally by Alibaba Cloud to support AI-related services, demonstrating comprehensive technical capabilities.

Kentec, a subsidiary of Kenmec Mechanical Engineering, is on track to achieve a significant profit turnaround by 2026 as it addresses rising demand for AI server cooling technology. As growing AI workloads push the physical limits of server chips, Kentec's leadership is strengthening its position with new liquid-cooling innovations for large-scale data centers.

Taiwan-based Kenmec Mechanical Engineering celebrated its 50th anniversary on January 24, 2026, marking a significant evolution from a traditional engineering contractor to a technology platform leader. Under founder and president Frank Hsieh and chairman Kevn Hsieh, the company is positioning itself around four core sectors—smart manufacturing and logistics, semiconductors, public infrastructure, and AI robotics—which form the basis of its growth strategy through 2026.

Nvidia CEO Jensen Huang made a quiet entrance into Shanghai for his first China visit of 2026, landing at the company's new office—strategically positioned just 300 meters from AMD's Shanghai headquarters.

The Trump administration is planning to acquire a 10% equity stake in US rare earth mining company US Rare Earth through a combined debt-and-equity investment valued at approximately US$1.6 billion, according to multiple media reports. The move is aimed at reducing the US's reliance on China for critical minerals while strengthening national security and high-tech supply chains.

As global industrial landscapes restructure, Taiwanese companies are making record investments in the US, driven by a strategic shift from cost-cutting to resilience in supply chain management. AU Optronics (AUO) chairman and CEO Paul Peng underscored the necessity for Taiwanese firms to transition from passive manufacturing bases toward leveraging the US as a critical market, innovation center, and capital platform.

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.

Hyundai Motor is establishing a specialized parts procurement organization to build a scalable mass production system for its robotics business, focusing on securing the global supply chain of key components such as actuators. This strategic move aims to prepare Hyundai for future market demands in humanoid robots.

Honhai Precision posted strong revenue growth in the fourth quarter of 2025, driven by robust shipments of high-end AI servers and the launch of Apple's new iPhone generation. The company's quarterly revenue scale expanded significantly, with cloud networking products contributing notably to its top line. This marks a strategic shift for Foxconn from relying solely on consumer electronics toward a dual focus on both consumer devices and AI servers as key growth engines.

Tienpin United has officially transitioned from traditional life services to the AI sector, with its AI server cleaning business demonstrating strong growth momentum. The company reported that accelerating global demand for AI computing and data center deployments has driven interest in its liquid-cooling system-cleaning solutions from multiple mainstream clients.

LG Electronics India Limited has received an eligibility certificate from the Directorate of Industries, Government of Maharashtra, making the company eligible for incentives worth INR7.06 billion (approx. US$77.8 million) under the state's Electronics Policy 2016.

Pegatron is intensifying efforts in its AI servers business and expanding new ventures to sustain growth, according to statements from Co-CEO Gary Cheng. The company expects double-digit revenue growth in its automotive segment by 2026 despite cooling enthusiasm for electric vehicles (EVs).

Pegatron is poised to continue its strong expansion in the artificial intelligence (AI) server market as it enters its fourth year, with expectations of sustaining triple-digit revenue growth in 2026. Co-CEO Gary Cheng expressed confidence that the company's AI server segment will surpass its 2025 performance, aiming to double this year's growth rate.

At major international auto shows, sleek supercars and long-range electric vehicles are no longer the sole attractions. Increasingly, visitors encounter humanoid robots moving through exhibition halls and smart wearable devices synced in real time with driving data.

The Global Electronics Association's latest "2026 Electronics Industry Trend Forecast" highlights critical challenges and shifts that will impact the sector over the next few years. Chief among these are energy infrastructure constraints that are throttling AI expansion, a move toward strategic interdependence in regional supply chains, and advancements in packaging technologies that are transforming industry dynamics. These developments signal substantial changes in investment approaches, geopolitical relations, and manufacturing policies worldwide.

As the automotive sector pivots toward autonomous driving technologies, Taiwan's optics industry is rapidly evolving from a consumer electronics supplier into a critical player in advanced vehicle sensing systems. The transition reflects broader shifts in automotive design where cameras serve as fundamental sensory organs rather than peripheral accessories, driving new technical and commercial demands.