Taiwan Stock Market 2026 Investment Map: AI Supply Chain Shortages Trigger Billion-Dollar Stock Restructuring

Supply chain tensions become the norm, Taiwanese companies secure positions in the global AI wave

By 2025, Taiwan’s tech supply chain faces unprecedented tightness. From advanced chip manufacturing, cooling solutions to high-end materials, the entire industry is experiencing capacity competition. The driving force behind this phenomenon is straightforward: booming server orders driven by global AI infrastructure development. International chip giants have repeatedly visited Taiwan for procurement, positioning Taiwan as a global R&D hub, highlighting the strategic value of Taiwanese companies in this round of competition. Against this backdrop, the list of high-value stocks continues to expand, and new ETFs see explosive volume upon listing. How should investors interpret these signals?

Great Changes in the High-Value Stock Landscape: From Design to the Entire Supply Chain

By mid-December, the number of high-value stocks in Taiwan’s stock market has reached 28, setting a record. Notably, the composition of this list has undergone a qualitative change — no longer limited to IC design but extending to cooling, electronic components, testing interfaces, and other parts of the entire industry chain, directly reflecting the spillover effects of AI demand being fully unleashed.

Looking at specific stocks: Xinte continues to lead the rally, benefiting from its BMC chips becoming standard configuration in AI data centers, with annual gains exceeding 100%. The cooling sector is rising fastest, with Qihong and Jiance both surpassing the high-value threshold, with gains approaching or exceeding double. On the materials side, a “dark horse” has emerged — Taiwan Optical (Tai Guang Dian) surged 159% due to tight supply of high-speed copper foil substrates and fiberglass cloth. Chip packaging and testing companies such as Chuanhu, Yingwei, and Wangsix also gained over 140%. The logic behind these figures is clear: supply shortages directly translate into stock price premiums. Even Delta Electronics, a traditional heavyweight, has surged to the edge of high-value stocks due to the surge in power demand from AI data centers, overtaking others in ranking.

Material shortages persist, supply chain pressure reaches the highest in over a decade

The specifications of AI servers are rising sharply, triggering upstream material shortages. High-end fiberglass cloth and low-loss copper foil substrates are continuously out of stock, with prices climbing. Industry research indicates that the next-generation platforms of leading international chip manufacturers will adopt higher-grade copper foil and fiberglass solutions across the board, marking an irreversible upgrade in technology.

This wave of material shortages presents profit margin expansion opportunities for Taiwanese manufacturers. Companies like Tai Guang Dian, Lianmao, and Taiyao directly benefit; downstream PCB manufacturers such as Zhen Ding and Xinxing maintain full capacity, with strong demand for ABF substrates laying a foundation for growth into 2026. The profit structures across the supply chain are being reshaped.

New ETF components reveal institutional trends, AI army taking shape

Market funds are not only chasing individual stocks but also pouring into thematic ETFs. Recently listed Fuhua Future 50 (00991A) raised over 10 billion yuan. Although it experienced a correction on its first trading day, its daily trading volume exceeded 230,000 units, topping ETF trading volume charts.

Reviewing its top ten holdings, almost all revolve around the AI theme: TSMC, Hongjin, Qihong, Weiying, Tai Guang Dian, Delta Electronics, etc. This list is essentially an “investment map” of the AI supply chain recognized by institutions — semiconductors account for 35-45%, AI data center components 35-45%, servers and networking equipment 5-15%, supplemented by financial and traditional industry allocations for stability. Fund managers point out that AI remains the primary growth engine for Taiwan stocks, with corporate profits expected to grow about 20% year-over-year by 2026. In a context of moderate interest rate cuts, a bullish trend is expected to continue.

Next wave of innovation: new platforms launch and cooling technology iteration

Looking ahead to 2026, new generation computing platforms from international chip companies are entering deployment cycles, with comprehensive upgrades in cooling, power consumption, and interconnect bandwidth. Major foundries like Quanta, Weiying, and Hon Hai are positioned as core partners, with related power, cooling, and PCB suppliers set to benefit again.

From a technological evolution perspective, silicon photonics and co-packaged optical solutions are key to breaking through high-speed transmission bottlenecks. Taiwan has established a complete ecosystem in epitaxy, optical components, and packaging, with companies like Lianya and Wanmiao showing potential. Liquid cooling technology is also rapidly advancing — as high-performance chips surpass the kilowatt power consumption threshold, the penetration rate of liquid cooling is expected to jump from less than 10% now to over 60% in the next three years, with Qihong, Shuanghong, and Jiance already positioning themselves early.

Investor perspective: seize the shortage links, beware of valuation traps

After a rally, Taiwan stocks are inevitably subject to volatility and valuation concerns. However, from an industry fundamentals perspective, the capacity shortages related to AI are unlikely to ease before 2026, especially in advanced packaging, high-end materials, cooling systems, and power infrastructure. In the short term, supply constraints will continue to support the stock performance of related high-value stocks. Investors should focus on stocks and ETFs that are positioned in tight supply segments and have rising gross margins.