Highlights

Taiwan's stock market shows significant growth, nearing the 27,000-point milestone without any pressure from recent market events like the Mid-Autumn Festival. Hon Hai achieves record monthly revenue of 837.1 billion in September. Additionally, DRAM prices are anticipated to increase by over 10% in Q4 due to rising demand fueled by AI developments.

Sentiment Analysis

• The overall sentiment for Taiwan's stock market is positive as it approaches a new milestone without external pressures.
• Hon Hai's performance boosts investor confidence, reflected in its record earnings figures.
• Anticipation of rising DRAM prices suggest robust future market activity, with AI continuing to drive fundamental changes.

Article Text

The Taiwan stock market is showing impressive upward momentum, poised to challenge the 27,000-point barrier. Last week's increase of an astonishing 1,180 points has set a new historical benchmark. Led by industry giant TSMC (2330-TW), the market is experiencing robust advancements across various sector groups. Currently, no significant negative influences loom over the market, although caution is advised, given the U.S. stock market habit of correcting after substantial gains.

In recent years, high-speed optical communication's importance has skyrocketed due to the surging demands of AI computing power and applications. The debut of OpenAI's innovative Sora 2 video platform, extending generative AI capabilities from static images and text to long-duration, high-definition videos, forecasts massive data flow escalations. This trend is expected to create significant demand in optical communication components, positioning Taiwanese manufacturers such as Alpha Networks (3363-TW), Blaze Group (3163-TW), and others for new opportunities.

Additionally, Largan Precision (3008-TW) reported September revenues of NT$6.235 billion, the highest in 11 months with a monthly increase of 4.48% and a slight annual decline of 4.43%. Cumulative revenue from January to September hit NT$43.929 billion, up by 6.5% from the previous year. With primary clients sustaining robust orders, October's performance is expected to harmonize with September's, underscoring Largan's indicator role in Apple's supply chain.

The booming data storage demand driven by AI impacts global cloud service providers' memory forecasts for 2026, leading to a surge in memory industry dynamics. This trend has brewing shortages from HDDs to SSDs, with the reprioritization of DRAM fostering displacement effects. The industry estimates DDR4, DDR5, and NAND Flash prices will rise by at least 10%, with some estimates placing them as high as 20%.

With September revenues of NT$837.1 billion, Hon Hai (2317-TW) announced an unprecedented monthly high. The third quarter's cumulative revenue reached NT$2.05 trillion, reflecting a 14.5% quarterly and 11% annual increase. Year-to-date revenues totaling NT$4.72 trillion mark a record for this period.

Marking the growth in demand for AI and automotive electronics, ASE Group (3711-TW) broke ground on its new K18B site at the Nanzi Industrial Park. Designed to meet future demands in CoWoS advanced packaging and final testing (FT), the project represents a NT$17.6 billion investment, expected to complete by Q1 2028.

AI and HPC advancements fuel sustained demand for advanced packaging. As chip testing complexity rises, testing interface industries face another upgrade wave. Taiwanese firms such as Synergy Integration (6223-TW) and Chroma (6510-TW) are rapidly expanding capacity to meet product demand, boosting future business prospects.

Key Insights Table