AGP Executive Report

Economic Strategy: President Lai called for a “chain of guardian mountains” across industries, urging leading firms to deepen supply chains at home. Taiwan’s economy grew 14.15% in the first half, but he flagged energy constraints, tariffs and competition from China. Software and Energy: New ECCT chair Frank Grunert sees room for Taiwan to build on its hardware strengths, especially in software, and says power projects need a more agile approach. AI Chip Supply: TSMC and GlobalFoundries signed a five-year, US$2 billion deal for silicon interposers in New York, with production expected to ramp in 2028—adding a US source for a key AI-chip component while advanced packaging remains centered in Taiwan. Industry Pressures: Micron workers in Taiwan voted overwhelmingly to authorize a strike as AI demand tightens memory supply. Taiwan’s return to nuclear power is also gaining attention as data centers and chipmaking drive up electricity needs.

AI Infrastructure: Taiwan’s Senao Networks launched x86 enterprise servers for AI and high-performance computing, including on-premises deployments that give businesses more control over data. Chip Supply Chains: TSMC and GlobalFoundries struck a $2 billion deal to make silicon interposers in New York, with production planned for 2028. Taiwan’s Micron workers also authorized a strike amid a pay dispute, raising fresh concerns for already tight memory supplies. Record Demand: TSMC reported record third-quarter revenue of about US$46.7 billion on strong AI chip demand, while Taiwan’s exports hit a monthly record in September and extended their growth streak to 35 months. India Ties: Taiwan–India trade rose 60% in the first eight months of 2026, with Taiwanese investment in India nearing US$7.5 billion as cooperation expands in semiconductors and advanced manufacturing.

Semiconductors: TSMC posted record third-quarter revenue of US$46.7 billion, up about 50% year over year as AI-chip demand continued to surge. Memory Supply: Micron workers in Taiwan authorized a strike, adding labor uncertainty to an already tight AI-memory market. Energy: AI’s growing electricity needs are renewing debate over nuclear power in Taiwan, while analysts warn power supply could constrain data-center expansion. Trade: Taiwan’s exports hit a record monthly high in September, extending their growth streak to 35 months. Biotech: Taipei-based TherapiAI showcased its drug-development platform in Japan, where pharmaceutical firms and CDMOs sought follow-up discussions and potential trials.

Exports: Taiwan’s September exports hit a record US$87.22 billion, up 60.9% year on year, extending the growth streak to 35 months. AI investment and demand for advanced electronics are driving the surge. Chip Demand: TSMC posted record third-quarter revenue as AI orders stayed strong, while Samsung forecast record profit on booming memory-chip sales. Workforce Pressure: A Micron union at its Taoyuan DRAM site voted overwhelmingly to authorize a strike over profit-sharing; no strike has been called, but a dispute could threaten a key production hub. Energy Supply: Taiwan is preparing to restart the Maanshan nuclear plant as early as 2028, with rising power needs from semiconductor and AI industries adding urgency to the debate. Battery Technology: Taiwan-based ProLogium unveiled a new electrolyte design and showcased battery prototypes with partners at the Paris Motor Show.

TSMC: Third-quarter revenue hit a record NT$1.49 trillion, up 50% from a year earlier and beating forecasts as AI demand surged. Chip Labor: Micron’s Taoyuan union secured authorization to strike over a bonus dispute, raising the prospect of the first strike in Taiwan’s semiconductor industry and potential disruption to a key memory supply base. AI Infrastructure: Power—not chips—may limit Taiwan’s data-center growth, Fitch warns, as grid constraints slow approvals for energy-hungry projects. Supply Chain Expansion: Taiwan-based Gudeng Aerospace opened its first U.S. manufacturing facility in Glendale, Arizona, extending the island’s supplier footprint. Consumer Insight: NIQ launched its Taiwan shopper panel, using e-receipt data to help brands and retailers track purchases across stores and channels.

AI Chip Supply: AMD plans a substantial supply increase in 2027 as demand outstrips capacity, with CEO Lisa Su citing constraints in wafers, advanced packaging and memory. AMD is planning further ahead and expects to expand its Taiwan supply-chain investment. Micron Labor: Nearly all Taoyuan union members who voted backed strike authorization over bonuses and profit sharing. No walkout is scheduled, but a dispute at a major DRAM and HBM hub could add pressure to tight AI-memory supplies. U.S. Expansion: Taiwan opened a representative office in Phoenix as technology investment in Arizona grows. TSMC’s planned semiconductor complex there totals $265 billion, and talks with Arizona officials covered investment, talent and industrial cooperation. Terafab Plans: Elon Musk says Tesla and SpaceX will build and operate their Texas chip plant; TSMC may only sublease space, while Intel remains a technology partner. Chip Design Ties: Taiwan is offering Eswatini access to its IC-design ecosystem and research facilities, building semiconductor talent links without requiring the country to construct its own fabs.

Semiconductor Deal Shock: Intel will keep working on Elon Musk’s Terafab Texas mega-project even after Musk signaled TSMC talks, unsettling investors and raising questions about who really benefits from the AI fab buildout. AI Supply-Chain Focus: Taiwan is pulling ahead in the AI trade versus South Korea, with Taiex outperforming Kospi and Taiwan’s earnings seen as broader “volume-driven” across chips, packaging, networking and servers. Energy Price Politics: Taiwan is preparing nearly NT$415B to keep Taipower/CPC and fuel suppliers afloat as CPC losses mount under government price-stabilization, highlighting how global oil and gas shocks get absorbed by state balance sheets. Taiwan-US Outreach: Taiwan opened a new Phoenix TECO office to serve Arizona and New Mexico, expanding services and business ties despite China objections. Power Infrastructure JV: LS Electric is forming a Taiwan power-infrastructure joint venture with Formosa Plastics affiliates (Nanya Plastics and KHI), aiming to move from equipment supply into grid and EPC contracts. Trade & Costs Watch: The US goods trade deficit widened to $105.6B in August as imports jumped, including higher semiconductor and industrial machinery imports—another reminder of how tightly Taiwan-linked supply chains feed global demand. Food Safety: Taiwan found pesticide residue in Vietnamese cabbage at twice the legal limit, tied to the broader “formaldehyde cabbage” scare and renewed border scrutiny.

Taiwan–US chip diplomacy: Elon Musk confirmed early talks with TSMC about joining his Texas “Terafab” venture, a move that could reshape the US AI hardware supply chain and intensify competition with Intel. AI chip supply crunch: AMD CEO Lisa Su said the company will “substantially increase” chip supply in 2027 and extend planning with partners to a 3–5 year horizon, underscoring how fast AI demand is outpacing capacity. Semiconductor security case: Taiwan prosecutors indicted 10 people for allegedly reselling restricted military-grade chips from US firms to Hong Kong for onward delivery to China, involving forged end-user verification for NCSIST. Offshore wind reliability: Orsted’s Greater Changhua 4 in Taiwan suffered a second Siemens Gamesa turbine blade issue in two months, prompting an investigation while construction continues. Industrial automation snapshot: A new robot-density ranking shows South Korea leading with 1,220 industrial robots per 10,000 manufacturing workers, highlighting how automation intensity varies by workforce size. Trade and logistics pressure: A Reuters report said the US trade deficit widened to $105.6B in August as imports hit a record, while another report described China’s LOGINK shipping-data system stalling internationally—both signals of ongoing supply-chain friction. Regional investment momentum: The Philippines’ PEZA is racing toward its P300B investment goal after approvals surged in the first nine months, with Taiwan among the top foreign sources. Labor and relocation: Taiwan’s Kuai Kuai union ended a five-day strike after a relocation compensation deal, a reminder that industrial expansion still depends on workforce stability.

Taiwan–US Political & Security Links: U.S. Sen. Michael Bennet is visiting Taipei to discuss U.S.-Taiwan relations, regional security, and even space cooperation, underscoring Washington’s continued engagement. Cross-Strait Tech & Industry Pressure: Arizona’s new Taiwan economic/cultural office opened despite Chinese consulate warnings, with local leaders stressing semiconductor-focused collaboration. Semiconductor Supply Chain Finance: Banks across Asia are pouring record debt into AI chip and data-center buildouts; Taiwan lenders reportedly extended NT$4T in loans in early 2026, much of it tied to the AI supply chain. TSMC/AI Market Momentum: Markets tracked AI optimism as Hon Hai’s strong September sales fed sentiment; TSMC and AI-linked stocks helped lift major indexes. Offshore Wind Reliability Watch: Ørsted reported a second turbine blade incident at Taiwan’s Greater Changhua 4 in under two months, working with Siemens Gamesa to determine the cause. Cyber/Spying Case: The FBI arrested a California real estate agent accused of surveilling Taiwan President Lai’s family for China, highlighting ongoing risks around cross-border intelligence. UK–Taiwan Tech Cooperation: The UK and Taiwan agreed a science/innovation/tech collaboration covering digital trade, semiconductors, AI standards, space, telecoms, and net zero. Audio Hardware Innovation: Jazz Hipster unveiled a 24-bit/96kHz high-resolution wireless audio platform for active speakers, aiming to move beyond the industry’s 48kHz baseline.

AI Chip Supply Chain: TSMC shares hit intraday all-time highs after Elon Musk confirmed early talks with TSMC about joining his Texas “Terafab” AI chip venture, adding fresh momentum to Taiwan’s foundry expansion narrative. Contract Electronics: Foxconn (Hon Hai) reported record September revenue, topping NT$1 trillion, and Q3 sales rose 47% YoY to NT$3.03T on AI server and cloud/network demand. Robotics Production: NVIDIA and Foxconn disclosed quantified GB300 NVL72 robot assembly yield in live production—95%+ success on busbar installation and 90–95% on multi-connector insertion—marking a rare public performance benchmark. Defense & Aerospace: Taiwan received its first two newly built F-16V Block 70 jets at Chihhang Air Base, boosting air-defense readiness amid ongoing cross-strait pressure. Industrial Real Estate & Defense Manufacturing: Anduril expanded its Tustin logistics footprint with a new lease at LogistiCenter at 55 as it ramps drone and missile production. Energy & Industry Finance: STUF United Fund hosted a Taiwan–U.S. net-zero forum in New York focused on green finance and circular economy partnerships. Cyber Risk: Microsoft’s 2026 Digital Defense Report ranked Israel as the second-most targeted country globally by cyberattacks, with Taiwan also listed among the most targeted.

AI Hardware & Manufacturing: Nvidia and Hon Hai say robots improved assembly success for Nvidia’s GB300 NVL72 AI rack platform, pushing key steps above 90% (and busbar work above 95%), underscoring Taiwan’s role in scaling next-gen AI production. Semiconductor Supply Chain Watch: A separate market roundup notes Taiwan’s TSMC shares rising as investors react to softer U.S. jobs data and easing inflation worries, while AI-linked stocks draw fresh buying. Defense & Aerospace Delivery: Taiwan received its first two new-build F-16V Block 70 fighters (and earlier F-16V arrivals), with attention now shifting to the operational rollout of the Viper Shield electronic warfare system. Cross-Strait Security & Espionage: The FBI arrested an Irvine realtor accused of surveilling the U.S.-based son of Taiwan’s president for China, adding to the week’s focus on foreign-agent activity. Trade & Industrial Policy: A reshoring survey finds more U.S. manufacturers bringing work home, but highlights policy uncertainty and workforce constraints as key hurdles. Energy & Industry Demand: Global factory activity is picking up despite higher energy costs, with AI infrastructure and defense equipment cited as major drivers. Taiwan in Global Business: Taiwan’s foreign minister visited the U.S. and Central America to advance “China-free” supply-chain cooperation, including a planned Arizona office opening and a stop at TSMC’s Arizona plant.

Taiwan-US Tech & Diplomacy: Former President Tsai Ing-wen will visit the U.S. next week to speak at Stanford’s DEFCON 2026 on technology, democratic resilience and national security. China-free Supply Chains: FM Lin Chia-lung pushed a “China-free” supply-chain pitch in Guatemala with Taiwanese and U.S. business matchmaking, and then headed to Arizona to open the Taipei Economic and Cultural Office in Phoenix and visit TSMC’s Arizona plant. Aviation Connectivity: EVA Air plans to launch the first direct Delhi–Taipei route on Dec. 1, five times weekly, aiming to boost tourism and business travel. Defense Modernization: Taiwan received the first two new-build F-16C Block 70 jets at Chihhang Air Base, a delayed but milestone step in fighter modernization. Semiconductor Ecosystem: Japan is stepping up local outreach to Taiwan for chip investment as TSMC expands in Kumamoto and regional governments court Hsinchu-linked supply chains. AI for Care: Taiwan’s Institute for Information Industry and partners built an AI system that turns old photos and voice stories into personalized dementia-care videos, completing a proof-of-concept trial. Cybersecurity: Warlock ransomware is still exploiting year-old SharePoint flaws, including attacks on critical infrastructure and organizations with links to Taiwan. Energy/Power Finance: Acwa Power reached financial close for the Rabigh 2 expansion in Saudi Arabia, with Standard Chartered Bank (Taiwan) among lenders.

Japan–Taiwan Semiconductor Outreach: Japan’s local governments are stepping up ties with Taiwan as chip investment momentum grows, with delegations and pitches ranging from Hsinchu visits by Kitakyushu to outreach in Gifu and Miyagi, while JASM (TSMC’s Kumamoto operator) plans a second Kumamoto plant starting Dec. 2027. Taiwan–Japan Drone & Defense Tech: NSYSU was named southern Taiwan’s only national drone center, backing commercial-grade military drone tech and long-range anti-jamming video links, while US–Taiwan collaboration unveiled heavy-lift and export-focused drone models. Taiwan–UK Science Pact: Taiwan and the UK signed an agreement for satellite communications, silicon photonics, and semiconductor talent development. Semiconductor Supply Chain Signals: New reporting highlights ASML–TSMC large-format photomask collaboration and ongoing AI-driven demand, alongside investor focus on Intel’s foundry turnaround. Maritime Cooperation: Taiwan donated a patrol vessel to the Philippines, adding capacity for patrol, SAR, and disaster response. Consumer Safety Watch: Warnings spread over “squishy” toys sold with medical-grade syringes/needles, prompting investigations and regional alerts.

Taiwan-U.K. Tech Cooperation: Taiwan and the U.K. signed a science and technology arrangement covering satellite communications, silicon photonics, and semiconductor talent development—aiming to turn cooperation into concrete R&D projects. Semiconductor Supply Chain & AI Chips: A new ACEA study warns European automakers face chip and critical-material bottlenecks, with electrification pushing carmakers into direct competition with AI data centers for the same inputs. AI Hardware Race: Elon Musk confirmed talks with TSMC about his $16.8B Texas Terafab project, keeping pressure on Taiwan’s role in global AI chip capacity. Supercomputing Expansion: France’s Bull doubled supercomputer production after reopening an expanded Angers plant, boosting Europe’s ability to build AI systems with more European-sourced components. Defense Deliveries Watch: Taiwan received the first two delayed F-16V jets, while observers note the political optics versus the broader delivery timeline. Logistics & Trade Friction: India’s customs brokers flagged 72-hour-plus cargo delays at the Navi Mumbai air cargo hub, citing manpower, coordination, and handling infrastructure gaps.

Taiwan Defense & Aerospace: Taiwan received the first two newly built F-16V Block 70 jets on Oct. 2, with more deliveries expected soon, extending the island’s air-defense capacity as China’s gray-zone pressure continues. US–Taiwan Economic Diplomacy: Foreign Minister Lin Chia-lung is set to visit Arizona to meet officials and semiconductor firms, aiming to deepen industrial ties and encourage more Taiwan supply-chain investment in the US. Semiconductor Supply Chain: ASML’s High NA EUV is moving from promise to production reality, with Intel reporting over one million wafers processed; TSMC plans High NA for high-volume advanced nodes starting in 2030. Manufacturing Investment: Taiwan-linked AeternZ Semiconductor Testing (King Yuan) is considering a $1.3B Fort Worth plant for wafer probing and backend testing, with a major tax-abatement review ahead. Maritime Cooperation: Taiwan donated a patrol vessel to the Philippines, commissioned into the Philippine Coast Guard as practical maritime cooperation continues. Cyber & AI Security: Microsoft’s report flags Taiwan among the most targeted countries for cyber attacks, underscoring the pressure on AI-era defenses.

Taiwan Defense & Aerospace: Taiwan received the first two of 66 U.S.-made F-16V Block 70 jets at Chihhang Air Base in Taitung, starting acceptance and training for a major air-defense upgrade as Taipei weighs a still-delayed broader U.S. arms package. Semiconductor & AI Supply Chain: Micron warned the memory shortage will stay tight into 2027–2028, with much of next year’s output already sold—fueling “chipflation” pressure across AI hardware. Manufacturing & Labor: Kuai Kuai snack workers in Taoyuan extended an indefinite strike over a planned relocation after mediation failed, highlighting ongoing labor friction in Taiwan’s service and production ecosystem. AI Hardware for Local Development: GIGABYTE launched a 64GB unified-memory version of its AI TOP ATOM desktop platform, pushing more on-prem AI prototyping into offices and labs. Cybersecurity: Rapid7 reported Linux malware campaigns that mimic Asian email security appliances, underscoring the region’s growing exposure to targeted intrusions. Trade & Industry Policy: Taiwan’s chain-store association urged expanding foreign-worker access beyond current sectors, citing severe manpower shortages that could slow expansion.