Following the conclusion of tariff negotiations between Taiwan and the US, both sides have presented differing interpretations: Taiwan's Executive Yuan has expressed satisfaction with securing its four major goals, while US Commerce Secretary Howard Lutnick described the combined US$500 billion investment as a "down payment," and stressed plans to shift about 40% of Taiwan's supply chain and production capacity to the US before Trump's current term ends.

Taiwan's AI server supply chain delivered broad-based growth in 2025, fueled by surging generative AI and cloud data center spending, but the biggest gains clustered around two areas: system-level integration led by original design manufacturer (ODM)/electronics manufacturing services (EMS) manufacturers, and a set of high-power, AI-specific components—especially thermal solutions, rack hardware, and high-speed optical interconnect.

Memory packaging and testing firms PowerTech Technology and ChipMOS Technologies recorded significant profit increases in November 2025, reflecting robust demand in the memory sector. PowerTech posted a net profit after tax of NT$786 million (US$24.85 million), up 16.27% year over year, while ChipMOS reported NT$255 million, a 240% increase compared to the previous year.

The silicon photonics (SiPh) and common packaged optics (CPO) solutions supply chains are emerging this year. Japanese testing equipment maker Advantest says that although optical communications have advantages in energy efficiency and high transmission speeds, there remains three major technical challenges that have yet to be standardized before related chip products are formally launched. These issues will need to be addressed as the industry transitions from electrical to optical communications.

Amid escalating geopolitical tensions between China and Japan, China has recently imposed stricter review measures on rare earth exports to Japan. Chinese authorities now reportedly require exporters to submit more detailed declarations, including the actual use of rare earths, the products they are applied to, and whether these products are re-exported to the US or other third countries.

Samsung Electronics will reportedly begin test operations of extreme ultraviolet lithography equipment at its Taylor, Texas, fabrication plant in March, ahead of full operations planned for the second half of 2026, according to Hankyung. The facility is set to manufacture Tesla's AI5 and AI6 autonomous driving chips under a US$16.5 billion contract secured in July 2025.

The US' recent announcement of a 25% tariff on certain advanced computing chips, including Nvidia's H200 and AMD's MI325X, could have implications for Malaysia's semiconductor sector, though experts suggest immediate effects may be limited. The tariffs, justified by the White House on national security grounds, aim to incentivize domestic chip production and reduce reliance on overseas suppliers such as Taiwan.

Taiwanese integrated circuit design houses used the 2026 Consumer Electronics Show in the US to seek new partnerships, signaling that success in the next phase of edge artificial intelligence will depend as much on software and algorithms as on silicon.

Demand for power management integrated circuits (PMICs) from Taiwanese manufacturers is showing signs of stabilization, particularly in cloud AI servers, industrial control, and automotive markets, industry sources said. While consumer applications continue to experience seasonal declines, leading global PMIC players are concentrating on higher-end fields, creating opportunities for Taiwanese firms to expand.

Kaynes Semicon Private Limited, a wholly owned subsidiary of Kaynes Technology India Limited, has signed a Fiscal Support Agreement and related transaction documents with the India Semiconductor Mission (ISM), marking a key procedural milestone in the implementation of government-backed incentives for semiconductor manufacturing.