2026 Taiwan Stock Market New Opportunities: Can the AI Industry Chain Shortage Rally Continue?

In 2025, Taiwan’s technology industry faces a core challenge: severe capacity shortages. From GPU chips, advanced packaging processes to cooling modules and high-end materials, the entire supply ecosystem is racing to increase output, recruit talent, and compete for electricity resources. This AI supercycle has been ongoing since 2024 and shows no signs of slowing down. With Jensen Huang making multiple visits to Taiwan to expedite orders and even establishing Taiwan as a global R&D hub, it underscores the strategic importance of Taiwanese manufacturers in this wave. As the list of billion-dollar stocks expands and theme-based ETFs attract record funds, how should investors interpret industry signals and seize the next growth opportunity?

Reshaping the Billion-Dollar Stock Landscape: AI Demand Effects Spill Over Everywhere

By the end of last year, the number of Taiwanese billion-dollar stocks rose to 28, setting a new record. More intriguingly, this list is no longer limited to IC design companies but has expanded to include thermal management, PCB substrates, power supplies, testing interfaces, and other upstream and downstream sectors, fully reflecting the widespread spillover effects of AI business opportunities.

This year’s stock king remains Advantech (信驊), benefiting from BMC chips becoming standard in AI data centers, with annual stock gains exceeding 100%, approaching the 7,300 TWD mark at one point. In the cooling industry, Qihong (奇鋐) and JianCe (健策) performed remarkably, with annual increases near or over 100%, entering the billion-dollar stock list. Material supplier Taiwan Optical (台光電) surged 159% due to tight supply of high-end fiberglass cloth and CCL (copper-clad laminate), becoming the biggest black horse of the year.

Other stocks such as Chuanhu (川湖), Yingcui (穎崴), and Wangs (旺矽) also saw gains over 140%, validating the market’s basic logic: “When there’s a shortage, there’s a market.” Even Delta Electronics (台達電), long considered a stable allocation, challenged the billion-dollar threshold due to the enormous power demands of AI data centers, quickly rising in the market cap rankings.

Supply Chain Crisis Spreads: A Rare 10-Year Shortage Dilemma

As AI server specifications continue to upgrade, a shortage of upstream raw materials has been triggered. High-end fiberglass cloth and low-loss CCL (copper foil substrates) are in global demand, with prices continuously rising. Foreign research institutions predict that NVIDIA’s next-generation platform architecture will adopt higher-grade CCL and copper foil specifications, making material upgrades an irreversible industry trend.

This wave of material shortages has led to soaring gross margins for related Taiwanese manufacturers, including Taiwan Optical, Lianmao (聯茂), and TainYao (台燿). Downstream PCB and substrate manufacturers like Zhen Ding (臻鼎) and Unimicron (欣興) have maintained full capacity, with ABF substrate orders booming, laying the groundwork for revenue growth in 2026. Notably, this supply chain pressure is also beginning to impact automotive component stocks, as high-end connectors, thermal management solutions used in AI servers, and the overlapping technological pathways with electric vehicle (EV) demands have started to benefit some companies from capacity spillover effects.

New ETF Listing Becomes the Instant Trading Volume Champion: Institutional Deployment Is Clear

Market funds are not only betting on individual stocks but also pouring into themed ETFs. Recently launched Fuhua Future 50 (00991A) raised over NT$10 billion. Despite experiencing a discount on debut, its trading volume exceeded 230,000 shares, topping the ETF trading charts and demonstrating strong market enthusiasm.

The top ten holdings of this ETF are almost entirely focused on the AI industry chain: TSMC, Hongjin, Qihong, Wiwynn, Taiwan Optical, Delta Electronics, and others. The investment logic of this actively managed ETF reveals the institutional outlook: semiconductor industry (35-45%), AI data center peripheral components (35-45%), servers and networking equipment (5-15%), balanced with appropriate allocations in financial and traditional industries.

Fund manager Lu Hongyu (呂宏宇) publicly stated that AI will remain Taiwan’s main growth engine. He estimates that by 2026, the overall profits of Taiwanese listed companies could grow by about 20%, supported by a mildly declining interest rate environment, allowing the bullish trend to continue.

Emerging Technology Blueprint: VR Platform Launches a New Cycle

Looking ahead to 2026, industry focus will shift to NVIDIA’s new Vera Rubin (VR) platform launch. The platform will feature comprehensive upgrades in heat dissipation, power consumption, and interconnect bandwidth, expected to trigger a new wave of upgrade cycles. Contract manufacturers like Quanta, Wiwynn, and Foxconn have been identified as core partners, with their power supply, cooling, and PCB suppliers set to benefit again.

On the technical front, silicon photonics and CPO (co-packaged optics) technologies are key to overcoming high-speed transmission bottlenecks. Taiwan has developed a complete industrial ecosystem in epitaxy, optical components, and packaging, with companies like Lianya (聯亞) and WSM (穩懋) showing promising prospects. Meanwhile, as GPU power consumption reaches kilowatt levels, the penetration rate of liquid cooling technology, currently below 10%, is expected to rapidly rise above 60% in the coming years, with companies like Qihong, Shuanghong, and JianCe already taking the lead.

Investment Directions: Focus on “Shortage” Critical Links and Beware Valuation Risks

After a significant rally, Taiwan stocks are naturally prone to volatility and high P/E ratios. However, from an industry fundamentals perspective, the shortage of AI-related capacity is unlikely to be fundamentally resolved before 2026, especially in advanced packaging, high-end materials, cooling solutions, and power infrastructure. The supply-demand gap is expected to continue widening. Investors should focus on these “bottleneck” beneficiaries and monitor the valuation-to-fundamentals match to find a balance between risk and opportunity.