As the Legislative Yuan nears the end of its current session, opposition parties have proposed significant cuts and freezes to the 2025 central government budget. At a press conference on January 16, Premier Jung-tai Cho warned that these reductions would weaken Taiwan in five critical areas: technological development, national security, civil service performance, government communications, and overall national competitiveness.

AI cloud computing will remain the primary growth driver for the tech industry in 2025, while the outlook for consumer AI applications remains mixed, largely hinging on whether users can be convinced of the need to replace their devices, according to sources at IC design houses.

As AI embraces rapid developments, the future of AI-driven lifestyles will rely heavily on display technology. According to Taiwan's Industrial Technology Research Institute (ITRI), display technology is becoming integral to three key AI edge devices: TVs, AR/VR glasses, and smart cockpits. Leveraging the technological advantages of Micro LED, the emerging era of "AI of Things" (AIoT) is set to position Taiwan's display and sensor industries at the forefront of a new market.

Strong AI-related demand will drive TSMC's 20% compound annual growth rate in revenue over the next five years, according to chairman C.C. Wei during the company's latest earnings call. This optimistic outlook aligns with broader server supply chain indicators, as order and shipment volumes demonstrate continued momentum in AI server demand, even amid concerns about GB200 shipments.

As 2025 unfolds, China's smartphone market faces a wave of price cuts, with Apple launching promotions and Huawei following suit by adjusting its pricing. While manufacturers compete for market share through innovation in a contracting market, the increasing similarity of smartphone models and features has made differentiation challenging.

The automotive industry was once considered to be a key driver for Taiwan's semiconductor supply chain, prompting its makers to get in line with the global trend of regionalized production. But the automotive industry has been mired in turmoil in the past few quarters, with no improvements to be seen anytime soon. Automotive chips are expected to remain on the sidelines in the foreseeable future.

The US has introduced stricter export controls on chips with 30 billion transistors at 16/14nm nodes to limit Chinese access to advanced processors. Industry sources indicate that this will immediately impact Chinese AI accelerator developers.

Wistron announced its consolidated financial results on January 16, 2025, reporting a record-breaking annual revenue that exceeded NT$1 trillion (US$33.3 billion) for the first time, reaching NT$1.049 trillion. The gross profit stood at NT$84.116 billion, the operating net profit was NT$38.98 billion, the pre-tax net profit amounted to NT$40.057 billion, and the post-tax net profit reached NT$30.629 billion. Among the company's diverse portfolio, AI servers emerged as the primary growth driver.

Apple is reportedly set to launch a screen-equipped HomePod in 2025, though contrary to earlier speculation about OLED technology, it will feature an LCD panel exclusively supplied by Tianma Microelectronics in China. Taiwan's Radiant Optoelectronics will handle backlight module production. Industry insiders expect shipment volumes to remain modest throughout 2025.

The surge in AI demand has propelled the popularity of liquid-cooled servers, with numerous companies planning to integrate liquid cooling into their infrastructure. According to Google, liquid cooling was first introduced with the TPU v3 in 2020, and early adopters in Taiwan are already utilizing the newly released Trillium TPU.

Aetina, a subsidiary of Innodisk, has announced comprehensive support for the super mode feature introduced by Nvidia's Jetson Orin NX and Jetson Orin Nano modules. The company also announced a collaboration with Qualcomm, combining the latter's inference accelerators and advanced software with Aetina's edge computing hardware.

Cambricon Technologies, a leading AI chipmaker in China, has announced its 2024 financial forecast, estimating annual revenue of CNY1.07 to CNY1.2 billion (approx. US$146 to US$164 million). This marks a robust year-over-year growth of 50.8% to 69.2%. The company attributed the projected increase to its ongoing market expansion efforts and the growing adoption of AI applications, positioning 2024 as a year of significant revenue improvement compared to 2023.

With CES 2025 just concluded, DIGITIMES hosted the "2025 CES Insights: Analyzing New Trends in AI Applications" forum on January 14, providing exclusive updates and insights from the show.

As AI software and hardware giants turn their attention to India for profitable opportunities, the US's recent AI chip export controls limiting India's access to advanced processors have stirred concerns about the impact on strengthening US-India relations amid enduring ties between India and Russia.

Silicon photonics (SiPh) has garnered significant business interest as a technology solution for high-speed data transfer in the era of AI. Currently, leading US chip manufacturers maintain a substantial advantage, although Taiwan-based IC design firms are trailing; nonetheless, they have started to identify potential to penetrate the industry.

The Biden administration has introduced new AI computing power regulations as it prepares to leave office. This move is perceived by many as a form of "total control" over global AI computing power, particularly targeting countries outside the 18 major allied nations with relatively strict limits on AI chip purchases and application processes.

Japanese manufacturers of multilayer ceramic capacitors (MLCCs) are forecasting promising opportunities in the rapidly expanding AI sector, with surging server demand driving market growth. Business performance for the fiscal year 2024 (April 2024 to March 2025) varies across companies.

As President Joe Biden approaches the end of his term, his administration has unveiled comprehensive regulations on AI technology, addressing national security concerns and economic competitiveness. The Interim Final Rule on Artificial Intelligence Diffusion establishes restrictions on high-end chips and closed-weight AI models, while maintaining exemptions for open-weight models.

The expansion of artificial intelligence (AI) applications has established AI servers and related components as the primary growth drivers for IC distributors. With shipments of AI servers expected to increase quarterly in 2025, these robust contributions from AI are anticipated to further elevate distributor revenues throughout the year.

As humanoid robots take center stage at CES 2025, safety and machine learning remain crucial challenges in their development, according to DIGITIMES Research analyst Jin Pai. For Taiwanese companies, however, these challenges present opportunities to gain a foothold in the market.

The European Commission (EC) has voiced strong opposition to the Biden administration's expansion of export controls on AI chips and large language models (LLMs) to most regions worldwide.

The artificial intelligence revolution is moving from hype to reality, with CES 2025 demonstrating a clear shift toward practical AI applications across consumer technology, automotive, and smart living sectors. Industry analysts project global AI market size to exceed US$1 trillion by 2030, as major tech companies accelerate investments in AI infrastructure.

The recent US chip ban is expected to exacerbate the challenging circumstances for China's GPU industry, intensifying both market and production pressures.

Nvidia CEO Jensen Huang recently stated that quantum computing may take 15 to 30 years to achieve practical applications, highlighting the significant hurdles that lie ahead. Despite these challenges, interest in quantum technologies continues to grow, as evidenced by CES 2025, which featured a dedicated quantum computing forum. Major players like Google and IBM have also revealed ambitious roadmaps to guide their quantum computing development.

Compal Electronics is assessing the feasibility of setting up a server manufacturing plant in the US, with Texas being one of the potential locations, according to company president Anthony Peter Bonadero.