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AI Hardware Boom Drives Chip Stock Surge and Reshapes Global Markets

Aug. 28, 2025 | Technology & Innovation

Demand for artificial intelligence hardware is driving significant movements in chip stocks and shaping broader equity market trends.

**Global equity markets have reached new highs on strong AI hardware demand, with NVIDIA leading sector gains and foreign media naming Alphabet an undervalued AI play.**
NVIDIA’s stock has climbed 29% year-to-date, well ahead of Alphabet’s 8.4% rise and the S&P 500’s 10% gain. Despite robust second-quarter results—14% revenue growth, 22% EPS growth, and a price-to-earnings ratio of 20.3 versus the market average of 24.1—skepticism about Google’s long-term prospects has weighed on its valuation. Recent rumors that Alphabet and Apple are collaborating on Google’s Gemini AI model have given Alphabet’s share price a modest lift.

**NVIDIA’s growth momentum reflects easing supply constraints and strategic compliance to secure global market access.**
The company agreed to remit 15% of revenue from its H100 chip sales in China to the US government in exchange for continued export approvals. Morgan Stanley raised its revenue forecasts for NVIDIA’s upcoming quarters and boosted its price target from $200 to $206. NVIDIA also introduced the Jetson AGX Thor platform, touted as the “new brain of robots,” and rolled out the RTX PRO series based on the Blackwell architecture for enterprise data centers, further energizing Taiwanese AI and robotics stocks.

**TSMC remains central to the AI chip ecosystem, winning surging orders from major tech firms and hyperscale cloud providers developing proprietary processors.**
In the second quarter of 2025, TSMC reported $30.07 billion in revenue, with AI-related sales surpassing $10 billion for the first time. Its AI chip manufacturing and advanced packaging segment generated about $8.78 billion—up 3.67-fold year-on-year—while high-performance computing products, including ASICs for AI switching and edge devices, contributed $9.26 billion, a 9.8% increase. To comply with US export regulations under the Chip Equipment Act, TSMC is phasing out Chinese-made semiconductor equipment in its advanced wafer processes.

**Google is advancing its own AI hardware strategy with the seventh-generation Tensor Processing Unit platform, Ironwood, set to launch in 2026.**
Ironwood will feature up to 9,216 chips, each with 192 GB of high-bandwidth memory, and deliver 4,614 TFLOPS of compute performance—over 16 times the throughput of its 2022 TPU v4. TSMC is widely believed to be Google’s foundry partner for both the upcoming Pixel 10 phone SoC and its new data-center AI accelerators, reinforcing TSMC’s role as a critical supplier in next-generation AI infrastructure.

**In Taiwan’s equity market, investors have rotated from financials into electronics amid rising US Treasury yields and shifting risk appetite ahead of NVIDIA’s earnings report.**
On August 26, 2025, the Taiwan Stock Exchange index closed up 27.72 points at 24,305.1, even as foreign investors sold NT$14.5 billion of financial stocks including Taishin Financial, Runtexin, Mitac, Taiwan Cooperative Bank and Heku Financial. By contrast, foreign buying focused on electronics names such as Kangpei, Winbond, UMC, Hon Hai and Unimicron, buoyed by expectations of strong memory pricing, semiconductor demand and growth in the printed-circuit-board supply chain. The weighted index held above key moving averages and the OTC market set new highs, signaling continued bullish control despite short-term volatility.

### IMPACT ANALYSIS
**From this Development, various impacts could cascade through the system, to a lesser or greater extent, depending on the severity and criticality of the shocks.**

Domain	Causal Chain	Possible Outcome
Firms	(Enterprise AI adoption index ↑ → AI inference cost index shift ↓ → AI adoption GDP uplift ↑)	Lower AI inference costs spur enterprise AI adoption, boosting GDP through improved productivity.
Firms	(R&D intensity ↑ → Patent output per 100 firms ↑ → Unicorn density ↑)	Elevated R&D intensity and patenting activity fuel the emergence of deep-tech unicorns.
Firms	(Market-power / concentration index ↑ → Average labour productivity ↑ → Profit share of GDP ↑)	Increased market concentration enhances labor productivity and raises the corporate profit share of GDP.
Firms	(Return-on-invested-capital (ROIC) trend ↑ → Capex-to-cashflow ratio ↑ → Business fixed-investment growth deviation ↑)	Higher ROIC drives elevated capex, resulting in business fixed-investment growth above historical trends.
Technology & Innovation	(Dual-use export-control restrictiveness ↑ → Semiconductor fab utilisation rate ↓ → High-tech export market share ↓)	Stricter dual-use export controls depress fab utilization and reduce global high-tech export market share.
Technology & Innovation	(Minimum domestic semiconductor node (nm) ↓ → Domestic AI compute capacity (petaflop-days) ↑ → AI adoption GDP uplift ↑)	Smaller domestic process nodes expand AI compute capacity, supporting GDP gains from increased AI adoption.
Technology & Innovation	(Cloud-computing cost benchmark ↓ → Cloud API average latency ↓ → AI inference cost index shift ↓ → Total-factor productivity growth from tech ↑)	Lower cloud-compute costs and latency reduce AI inference expenses and accelerate total-factor productivity growth.
Geopolitics & Defense	(Sanctions & export-control aggressiveness ↑ → Sanctions breadth index ↑ → Supply-chain relocation cost (% GDP) ↑)	Broadening sanctions drive higher supply-chain relocation costs, weighing on GDP.
Competitiveness	(Trade-openness & preferential access ↑ → FDI net inflow (% GDP) ↑ → High-tech export market share ↑ → Total-factor productivity level vs frontier ↑)	Expanded trade openness attracts FDI, boosts high-tech exports, and narrows the productivity gap with frontier economies.
Financial System	(Financial-market openness ↑ → Cross-border portfolio flows ↑ → Real export market-share change ↑)	Enhanced financial-market openness increases portfolio inflows, strengthening real export market share.
Macroeconomics & Growth	(Global value-chain reconfiguration velocity ↑ → Supply-chain disruption days per year ↑ → Inflation volatility ↑)	Faster value-chain reconfiguration heightens supply disruptions and amplifies inflation volatility.

### BOTTOM LINE

- Global demand for AI hardware has lifted chip and electronics equities to new highs, with NVIDIA up roughly 29% year-to-date versus Alphabet’s 8.4% and the S&P 500’s 10%, and that rally is concentrated in companies tied to AI accelerators, advanced packaging, memory, and PCB supply chains.

- NVIDIA’s strategic decision to accept a 15% revenue remittance on H100 China sales in exchange for continued export approvals demonstrates that regulatory compliance can be monetized to preserve market access, and that such concessions materially shape near‑term revenue and supply‑chain planning.

- TSMC’s Q2 2025 results—$30.07 billion in revenue with AI-related sales surpassing $10 billion and its advanced packaging rising 3.67-fold—cement the foundry’s role as the linchpin of the next-generation AI ecosystem and make its capacity and equipment choices a systemic constraint for AI hardware rollout.

- Google’s Ironwood TPU (9,216 chips per pod, 192 GB HBM per chip, ~4,614 TFLOPS) scheduled for 2026 signals hyperscaler vertical integration into AI acceleration, which will increase demand for cutting-edge nodes and put additional pressure on TSMC and other leading fabs for constrained process capacity.

- The rotation of foreign capital in Taiwan—from NT$14.5 billion of financials into electronics such as Winbond, UMC, Hon Hai, and Unimicron—indicates investor behavior that favors AI‑value‑chain exposure and will likely continue to support equity performance in semiconductor and manufacturing names until earnings or macro signals reverse sentiment.

- Falling AI inference costs driven by higher-performance chips and new data-center products (e.g., NVIDIA Blackwell-based RTX PRO, Jetson AGX Thor, Google Ironwood) are likely to accelerate enterprise AI adoption, creating measurable productivity gains across services and manufacturing as cloud and on-premise inference become cheaper and faster.

- Elevated returns at market leaders are likely to translate into higher capex and R&D spend—raising the capex-to-cashflow ratio across the sector and driving business fixed‑investment above historical trends as firms race to secure capacity, packaging lines, and intellectual property.

- Tighter export controls and export‑compliance measures (illustrated by NVIDIA’s remittance and TSMC’s phase‑out of Chinese-made equipment) will encourage supply‑chain reconfiguration toward trusted jurisdictions, raise short‑run relocation and qualification costs, and increase the probability of regionalized supply chains with higher structural costs.

- Market concentration around a few dominant firms (NVIDIA, TSMC, select hyperscalers) will likely increase sectoral profit shares and productivity through scale economies, while simultaneously heightening regulatory and antitrust scrutiny and raising barriers to late entrants in advanced nodes and AI accelerators.

- A ramp in R&D intensity and patenting across chip design, packaging, and AI systems is likely to expand the pipeline of deep‑tech startups and increase unicorn formation, with spillovers concentrating in locales with foundry ties and engineering talent pools (Taiwan, US, South Korea, parts of Europe).

- Financial‑market flows will remain sensitive to geopolitical headlines: portfolio reallocations toward AI hardware can amplify currency and equity moves in suppliers’ home markets, while adverse export‑control news can rapidly depress valuations and cause short-term volatility in fabricators and fab‑equipment suppliers.

- Practical actions for stakeholders are straightforward: firms should secure multi-year foundry capacity, diversify supplier base and tooling sources, accelerate product roadmaps that reduce inference costs, and hedge regulatory exposure; policymakers should calibrate export measures to avoid unnecessary decoupling while expanding incentives and workforce training to attract fabs; and investors should overweight companies with durable access to advanced nodes and demonstrable revenue exposure to AI compute while monitoring geopolitical and valuation risk.

NVIDIA Earnings Ignite Taiwan Stock Market Rally Led by AI and Semiconductor Surge

Aug. 28, 2025 | Firms

NVIDIA’s product launches and earnings outlook propelled Taiwan’s stock market rally, lifting technology, semiconductor and robotics shares.

**Taiwan’s stock market rebounded sharply in late August 2025.**
On August 26, the weighted index closed at 24,305.1, a gain of 27.72 points, and on August 27 it rose further to a session high of 24,506.45, nearing the all-time peak of 24,551. The market recovered from an early dip below its 10-day moving average and held above key technical thresholds, including the 5-day and monthly moving averages, amid elevated volatility.

**NVIDIA-related and AI-theme stocks across the supply chain led the rally.**
Robot-concept shares jumped after NVIDIA launched the Jetson AGX Thor developer kit and previewed its “robot brain” product; Hi-Friend and Solomon hit daily limit-up prices, and Advantech and Quanta Technologies posted gains exceeding 10%. Broader AI-linked component makers—Epistar, Realtek, ADATA and Phison—attracted strong institutional interest as memory prices rose and demand intensified for advanced packaging, silicon photonics and cooling solutions.

**TSMC supported the advance, rising NT$5 to close at NT$1,175 on August 26 and reaching NT$1,190 on August 27.**
Its Arizona wafer fab turned profitable in the first half of 2025 after four years of losses. TSMC’s strength served as a bellwether amid US-China technology tensions, reinforced when its chairman confirmed the US government holds no equity stake. Large caps such as Hon Hai, MediaTek and Novatek also moved higher, while defense and drone stocks—Aerospace Industrial Development and Thunder Tiger—hit limit-up or near-limit-up levels.

**Trading activity reached record levels, with NT$122.4 billion exchanging hands in the final minute on August 26 and a total daily turnover of NT$514 billion.**
Foreign investors bought a net NT$24.1 billion on August 26 after prior selling, while institutional investors net sold NT$13.8 billion. Domestic investors stepped in as net buyers, reflecting cautious optimism amid elevated volatility. High-dividend and ESG bond ETFs also drew inflows as investors sought lower-volatility assets.

**Federal Reserve Chair Jerome Powell’s dovish comments about imminent rate cuts boosted US equity benchmarks, which spilled over into Taiwan’s market.**
The New Taiwan dollar’s depreciation added complexity and prompted government measures to ensure orderly currency movements. The Ministry of Economic Affairs reported record-high export orders in July, up 15.2% year-on-year thanks to AI, high-performance computing and electronics, reinforcing confidence in export-oriented sectors.

**Investors now focus on NVIDIA’s Q2 earnings report after the August 27 close, viewing it as a potential catalyst for further momentum in AI-related stocks.**
Upcoming events—SEMICON Taiwan 2025 and the Taipei International Aerospace & Defense Industrial Exhibition—should sustain attention on robotics, semiconductors, defense and aerospace. Technical resistance near 24,551 points and key price levels for TSMC are likely to define the market’s near-term trading range.

Monitored Intelligence for Taiwan - Aug. 29, 2025

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494

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45

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68

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0

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0

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0

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Green corruption linked to KMT, DPP says

Taipei Times | English | News | Aug. 29, 2025 | Political Scandal or Corruption

Democratic Progressive Party (DPP) officials have linked corruption in Taiwan's green energy sector to Chinese Nationalist Party (KMT) politicians and their financial backers, citing recent investigative actions involving firms like HD Renewable Energy Co (HDRE). Taipei prosecutors detained Cheng Yi-lin, former deputy executive director of the Ministry of Economic Affairs’ Green Energy Industry Promotion Center, on charges including bribery, money laundering, and possession of unexplained assets. Executives from Taipei-based firms Tungwei Construction and HDRE have also been questioned in connection with the probe.

DPP spokesman Justin Wu emphasized that KMT members should examine their own roles in these scandals instead of attacking the government or the ruling DPP. Wu denied allegations that Cheng’s appointment was partisan and highlighted that HDRE’s chairman, Hsieh Yuan-yi, has close ties to the KMT, being the son-in-law of KMT elder Chang Ya-chung and a significant KMT donor. Wu accused the KMT of applying double standards by blaming the DPP for corruption while many involved individuals are KMT-affiliated.

The DPP supports comprehensive judicial investigations irrespective of party affiliation to eliminate bribery and corruption in the green energy industry. Wu stressed the importance of sustainable green energy development for Taiwan's economy and workforce, asserting that it should not be exploited for personal gain. He referenced several high-profile corruption cases involving KMT politicians, reinforcing the DPP’s commitment to prosecuting corruption within this sector.

綠能弊案／曾文生：施壓是形容詞鄭銘謙：證據到哪就辦到哪

Green Energy Scandal / Zeng Wensheng: Pressure Is an Adjective; Zheng Mingqian: Evidence Will Lead to Action

Yahoo News Taiwan | Local Language | News | Aug. 29, 2025 | Political Scandal or Corruption

Zheng Yilin, former deputy executive director of the Ministry of Economic Affairs’ Green Energy Technology Industry Promotion Center and known as the "Little Ying boy," is under investigation for accepting bribes from green energy firms and pressuring Taipower regarding feed-in capacity. Minister of Economic Affairs Guo Zhihui indicated to prosecutors that there are potentially larger cases still undisclosed. Taipower chairman Zeng Wensheng emphasized that pressure is just an adjective and urged judicial authorities to investigate thoroughly. Minister of Justice Zheng Mingqian stated the case is actively being pursued based on evidence, and Guo Zhihui expressed full respect for the ongoing investigation.

KMT legislators questioned Guo Zhihui’s involvement due to Hongde Energy's frequent interactions with him and called for his summons by prosecutors, while Guo denied any wrongdoing and threatened legal action against defamatory remarks. The MOEA could neither confirm nor deny Guo’s statement about "bigger ones" involved but stressed the need to aggressively investigate all green power corruption cases regardless of political affiliation. DPP spokesperson Wu Zheng accused the KMT of maliciously politicizing the case by linking energy policy with judicial matters, highlighting Hongde Energy's connections to the pan-blue camp through donations and family ties.

Further reports reveal Zheng Yilin was remanded in custody for accepting up to one million NT dollars in bribes and obstructing investigations by discarding his mobile phone during a search. KMT legislators assert this scandal represents only the tip of the iceberg and challenged the Lai administration to expose more corrupt individuals. The ongoing scandal has stirred political tensions, with party officials addressing resignations linked to the green energy controversy.

Additional unrelated news includes protests against Israel’s invasion of Gaza at the Venice Film Festival by Italian left-wing groups, a scam involving Taiwan Pay QR codes for fraudulent high-speed rail ticket refunds uncovered by Yunlin prosecutors, career highlights of entertainment figures Lin Chi-ling and Lee Da-hui, and updates on various cultural and political events including U.S. President Trump’s attempt to remove a Federal Reserve governor and developments in Taiwanese baseball and television industries.

Meteorological updates predict occasional showers or thunderstorms in eastern Taiwan and a 50% chance of a tropical disturbance in the South China Sea developing into a typhoon.

鄭亦麟疑喬電力涉貪遭羈押他驚呼竟有「饋線蟑螂」這新興行業

Zheng Yilin Suspected of Power Corporation Corruption and Detained, He Exclaims There Is a Emerging Industry of Wire-Tapping Cockroaches

The China Post | Local Language | News | Aug. 29, 2025 | Corporate Corruption or Fraud

Zheng Yilin, former deputy executive director of the Ministry of Economic Affairs’ Green Energy Technology Industry Promotion Center, was detained on August 27 on suspicion of accepting bribes to arrange power supply for a company. This incident has reignited public debate surrounding corruption and green energy issues. Taipei City Councilor Yang Zhidou expressed concern over unscrupulous private businesses exploiting Taipower, Taiwan’s state utility, to siphon funds illegally, describing the situation as deeply troubling and highlighting the rise of an illicit industry termed "feeder-line cockroaches."

Yang recalled his experience assisting with installing charging infrastructure for green-energy vehicles, emphasizing that applying for power supply from Taipower is legally grounded and usually involves safety inspections and cooperation with management committees. He questioned whether facilitating power applications without bribes could be wrongly construed as favoritism, raising concerns about future support from Taipower's staff if such actions are criminalized. However, following media reports, Yang concluded that private firms have indeed exploited Taipower’s resources, circumventing the user-pays principle and turning electricity into a commodity manipulated by a few individuals.

Yang called for Taipower to address these irregularities alongside considerations of restoring nuclear power generation, warning that failure to rectify such issues will harm Taiwan’s energy development. The broader context involves related controversies and political critiques, including accusations toward Hongde Energy and political figures, illustrating ongoing scrutiny of green energy policy and corruption allegations within Taiwan’s energy sector.

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