Why Is the AI Hardware Race Splitting Into Two Tracks and Why Taiwan Matters?

Q1. What is driving the shift from a GPU-only boom to a dual GPU and ASIC race?
Demand for custom AI chips has accelerated as hyperscalers push for efficiency and scale. Hon Hai is producing over 1,000 AI racks per week for TPU deployments and plans to double output by 2026. Analysts expect high-end ASIC shipments to grow 41 percent annually. This signals a new phase in AI infrastructure where diversified hardware suppliers become the more resilient winners.

Q2. How is Taiwan consolidating its upstream position in advanced materials and semiconductor manufacturing?
A new 500 million Euro materials mega site in Kaohsiung will produce thin-film solutions and specialty gases essential for advanced nodes. Executives say the site can meet about 80 percent of Taiwan’s thin-film needs. This local-for-local strategy reduces logistics risk, strengthens resilience, and deepens Taiwan’s integration into the global AI supply chain.

Q3. Why is Southeast Asia emerging as a new strategic front in AI infrastructure?
Major AI builders are expanding their data center footprints across Singapore, Malaysia, Thailand, and Vietnam. This shift is driving demand for server chassis and racks that must be produced regionally. Taiwanese manufacturers such as Chenbro, Wistron’s network, and JPP-KY are scaling capacity in the region. This positions them to capture the next wave of AI-driven buildouts.

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