The supercycle triggered by the AI wave has helped Taiwan’s exports attain file highs this 12 months, and the Taiwan inventory market has adopted go well with with a dramatic V-shaped restoration. Waiting for the primary quarter of subsequent 12 months, the Taiwan Inventory Change’s analysis crew at Uni-President Funding Belief believes that, benefiting from rate of interest cuts and a surge in AI demand, the Taiwan Inventory Change Weighted Index (TWSE) has the potential to proceed difficult new highs. When it comes to industries, they’re optimistic about AI server upgrades, that are anticipated to deliver leapfrog development alternatives to 3 main sectors: AI ASICs, thermal administration, and PCB/CCL. Nevertheless, they have to nonetheless pay attention to remaining market headwinds, together with potential slowdowns in development information resulting from a excessive base, and uncertainties arising from commerce protectionism and geopolitical conflicts, all of which might trigger occasional fluctuations within the world financial upswing.
The largest shock to the funding market in 2025 will undoubtedly be Trump’s tariff insurance policies. Nevertheless, due to the surge in AI demand and the dramatic shift in tariff coverage, the TWSE Weighted Index rebounded quickly after hitting its lowest level on April ninth, recovering by as a lot as 60% by early December—a stage of volatility not often seen in historical past. Coming into the primary quarter of subsequent 12 months, the efficiency of the Taiwan inventory market will proceed to be carefully linked to the US economic system. The US economic system is pushed by three primary elements: First, the fast development of funding by tech giants will make a considerable contribution to GDP; second, fiscally, tariff revenues will stabilize the fiscal deficit, and the tax cuts beneath the “Large America” invoice will positively enhance US company funding and personal consumption; third, the cycle of rate of interest cuts will help a excessive inventory market valuation, and a weak greenback will additional improve the abroad earnings of US corporations.
In Taiwan, the Uni-President Funding Belief’s Taiwan Inventory Analysis Group acknowledged that contemplating the continued acceleration of the AI business’s development, they predict that Taiwanese corporations’ earnings are more likely to obtain double-digit development once more subsequent 12 months. The Taiwan inventory market’s efficiency has traditionally proven a robust constructive correlation with company profitability; subsequently, they’re optimistic in regards to the Taiwan inventory market subsequent 12 months, not solely due to its sound fundamentals, but additionally as a result of the weighted index has a major likelihood of reaching new highs.
Concerning particular business momentum, the Uni-President Funding Belief’s Taiwan Inventory Analysis Group is optimistic that with the continual innovation of AI servers, not solely will the market dimension develop considerably, however it’s going to additionally create funding alternatives for the upgrading of peripheral elements. Within the AI server sector, NVIDIA’s GB sequence server shipments are anticipated to double subsequent 12 months in comparison with 2025. Concurrently, the rise of self-developed chips will usher in mass manufacturing of ASICs. Each the manufacturing of the GB sequence and AI ASICs will depend on Taiwanese producers with superior CoWoS packaging capability, and their profitability is anticipated to enhance additional.
The improve of AI servers additionally brings new business funding alternatives. The elevated utilization and specs of PCBs and substrates won’t solely enhance demand for high-end CCL (copper foil substrate) merchandise, however the warmth dissipation business may also play an important position. The Uni-President Funding Belief Taiwan Inventory Analysis Group estimates that the market dimension for air cooling, liquid cooling, and immersion cooling all have the potential to attain double-digit compound annual development charges; amongst these, the demand momentum and development charge of the liquid cooling market would be the most vital.
Moreover, although humanoid robots are nonetheless a ways from mass manufacturing, the Uni-President Securities Funding Belief Taiwan Inventory Analysis Group stays optimistic that humanoid robots will turn into an vital new blue ocean for technological functions sooner or later. Associated elements embrace battery packs, warmth dissipation, carbon fiber, communication, and sensing programs, in addition to precision equipment akin to linear/rotary actuator modules used to enhance the steadiness of robotic strolling. All of those might turn into new improvement alternatives for Taiwanese producers.
