Taiwan’s manufacturing business-climate indicator moved into the index’s red “prosperity” category in July, with the Taiwan Institute of Economic Research (TIER) saying on August 31 that a sharper rise in optimism among local manufacturers lifted its operating environment index. At the same time, year-over-year export growth to the US fell to 28.0% from 267.6% in January, the lowest level since February 2025.

AI-driven demand for optical transceiver modules is rising rapidly, and LuxNet said its business in the second half of 2026 will grow sharply from the first half. With capacity coming online in 2027, revenue from data center interconnect (DCI) products is expected to multiply, driving a leap in overall operations, while 1.6T optical modules are slated to enter mass production in the second half of 2027.

U-Best Innovative Technology, a unit of Sun Yad Group, is accelerating development of fluorine-free coatings to capture replacement demand driven by EU and US state-level regulations restricting the use of per- and polyfluoroalkyl substances (PFAS) and other "forever chemicals." The company is targeting high-end applications in foldable phones, semiconductors, and displays, with product launches expected in the first quarter of 2027 at the earliest.

Nvidia reported second-quarter revenue for fiscal year 2027 of US$96.22 billion, a 106% year-over-year increase, driven by a 117% surge in data center revenue to US$89 billion. With third-quarter revenue of fiscal year 2027 projected to hit US$108 billion and full-year fiscal year 2028 revenue expected to grow around 70%, Nvidia revealed that current supply capabilities meet only about 70% of customer demand. This indicates that the primary constraint on Nvidia's sustained hyper-growth has officially shifted to the supply side.

Unimicron, a major Taiwanese IC substrate maker, came under intense supply chain scrutiny last week after reports that prosecutors and investigators searched the company over a suspected "origin washing" case. The move has put long-standing cross-border production arrangements in Taiwan's electronics sector under sharper review.

Once mocked as "computers on the nose bridge," AI smart glasses have long suffered from a trade-off between advanced AI capabilities and lightweight comfort. However, this race is set for a major turning point in 2027. Future models promise to combine powerful AI, superior thermal management, and accessible price points, offering a wearing experience so seamless that users will barely notice they are wearing AI hardware.

Apex Dynamics is optimistic about its business outlook for the second half of 2026, with planetary gear reducers emerging as a key growth driver. The company said its results for the first half of the year posted double-digit profit growth, while the reducer business continued to lead expansion.

At GATE 2026, Kaizhong, a major Chinese commutator maker, used its display to showcase how its automotive business has laid the groundwork for expansion into data centers, dexterous hands, and drones. The company is also targeting new opportunities in Southeast Asia as Chinese automakers deepen their regional footprint.

Compound semiconductor supply-chain players say China has recently eased some substrate export controls, but the upgrade of high-frequency transmission in AI data centers toward 200G and 400G has made optical communications a key technology breakthrough, creating a severe indium phosphide (InP) substrate shortage and sparking a trend toward signing long-term contracts and locking up capacity to secure stable supply.

China's CMOS image sensor industry is gaining ground beyond smartphones, with robotics emerging as one of the latest areas where domestic suppliers are linking sensor technology with higher-level perception systems.

As strong AI demand continues to soak up semiconductor capacity, some ICs and passive components are seeing shortages and longer lead times. Qisda's display maker Data Image has stepped up policy-driven inventory buildup, with some industrial control products now carrying supply lead times of as long as one year and materials for the first and second quarters of 2027 already secured in advance.

P-Duke Technology, a manufacturer of specialized niche power supplies, said during its earnings call on August 26 that it remains optimistic about its outlook for second-half and full-year 2026.

US President Donald Trump signed an executive order on August 26 declaring a national emergency over the security of America's electrical grid. It restricts the purchase, import, and installation of certain foreign-made "bulk-power system" equipment on cybersecurity and national-security grounds.

Nvidia's GPU roadmap is pushing 800VDC into the spotlight as a key next-generation breakthrough, with battery backup modules (BBUs) set to gain in both quality and volume as high-density AI factories shift toward the new power architecture.

Samsung Electronics' first tri-fold handset of 2025, the Galaxy Z TriFold, has repeatedly sold out, but with global shipments of only about 30,000 units, it functioned more as a technology showcase. A second-generation model is expected in the second half of 2027, with thinner designs, durability, and mass production capability as the next focus.

Nvidia is aggressively expanding into open-source models and positioning itself as the world's largest open AI contributor, as CEO Jensen Huang reshapes the company from a supporter of the open AI ecosystem into a builder. The company recently spent US$6 billion to license Poolside's technology and hire about 100 of its engineers, adding momentum to the US open-model push.

CMOS image sensor (CIS) manufacturer Silicon Optronics (SOI) president Bob Chen pointed out during an earnings call on August 25 that artificial intelligence (AI) demand has caused price hikes and shortages for memory since the fourth quarter of 2025. With market supply remaining tight and showing no signs of easing, this has led to a clear polarization in the security camera market. Going forward, the company will continue accelerating its development of higher-end back-side illumination (BSI) products to improve its overall product mix.

Foxconn is accelerating the geographic diversification of its global manufacturing capacity as AI server demand surges and supply-chain regionalization continues, with 2026 capex expected to rise more than 30% year on year. In China, however, the company is not mounting large-scale capacity expansion in step with the U.S., Mexico, India, and Vietnam. Instead, it is shifting investment toward equipment restructuring, precision manufacturing upgrades, and higher-end production capabilities at existing plants.

Xiaomi officially unveiled its next-generation in-house system-on-chip (SoC), the Xring O3, at its Xring Chip Technology Briefing on August 24, continuing to position the silicon as an AI flagship SoC.

Taiwan's AI server supply chain is stepping up investment in China, but expansion is concentrated in components rather than full-system assembly. By contrast, Taiwan's notebook PC production in China is mostly flat as the industry shifts to Southeast Asia and other non-China locations.

Global demand for AI and high-performance computing (HPC) has lifted investment returns for Taiwan-listed companies in China, with Foxconn continuing to lead the pack. According to CRIF, Foxconn's total China investment returns in the first half of 2026 reached NT$117.6 billion (US$3.7 billion).

Nvidia has reportedly notified major customers that server systems using its AI chips will rise by more than 15%, with the new pricing set to apply to models shipping from early 2027, including Grace Blackwell and the next-generation Vera Rubin platform. The move is expected to ripple through the chip and system supply chain, while industry figures say it could also lift the appeal of inference ASICs.

TPK Holding is accelerating its move from consumer touch panels into semiconductors, with its Through Glass Via (TGV) pilot line in Taoyuan, Taiwan set to begin operations in August or September. The company is also working with leading outsourced semiconductor assembly and test (OSAT) providers on the project, while its new Thailand production base aims to complete trial runs by year-end and begin volume production in early 2027.

Nvidia reportedly struck a US$6 billion deal with startup Poolside to license its technology and hire much of its staff. The technology and personnel will reportedly support the chipmaker's Nemotron models in a bid to compete with China's strength in open-source models, but the deal also puts Nvidia in competition with some of its biggest customers.