Taiwan Stocks: AI, Memory, and Automation Lead Amid Market Volatility

Highlights

Taiwan’s benchmark index opened higher, retreated from its intraday peak, and finished up 54.80 points at 46096.23, with turnover of 9765.47億. Institutional flows were mixed: foreign investors and dealers sold, while investment trusts continued buying. US technology and semiconductor shares rebounded as AI remained in focus, although investors are increasingly assessing whether heavy data-center investment can generate lasting revenue and profits. Taiwan memory stocks and automation-related suppliers drew attention. Orders for motion-control components are supported by semiconductor, AI, and automation demand, while companies are also exploring robotics. The market’s next direction depends on earnings, investment returns, and whether improving orders translate into sustained profitability.

Sentiment Analysis

• The overall tone is cautiously constructive. The index closed higher and institutional investors recorded a combined net purchase, but foreign investors and dealers remained net sellers. This indicates selective support rather than an unambiguous broad-market reversal.
• AI and semiconductor developments provide a positive backdrop. US chip shares advanced, Taiwan semiconductor depositary receipts rose, and demand for advanced packaging and AI-related components remains a prominent theme. However, the article emphasizes that capital spending must produce measurable revenue and earnings.
• Memory shares and automation suppliers are presented as areas of improving interest. Reported order visibility and tight supply in some markets may create opportunities, but inventory, product mix, capacity expansion, and actual shipments remain important tests.
• Risks include upcoming US earnings and Federal Reserve decisions, geopolitical uncertainty, oil prices, inflation, and limited trading volume. The assessment is therefore mixed, with a positive tilt toward selected industries rather than the market as a whole.

Article Text

Taiwan’s weighted index opened higher on Tuesday, extending the previous US market rebound. It began at 46,211.20 points and reached an intraday high of 46,585 points before selling pressure in some heavyweight electronics shares narrowed the gains. The index ultimately rose 54.80 points to close at 46096.23, with trading value of 9765.47億. The session’s retreat from the high, followed by a positive close, was described as a possible stabilization signal near the quarterly moving average, although subdued volume and event risks argue against treating it as confirmation of a durable recovery.

Institutional trading was divided. Foreign investors sold 81.03億元, investment trusts bought 236.45億元, and dealers sold 123.99億元. The three groups together recorded net buying of 31.42億元. Foreign investors had been net sellers for two consecutive sessions, dealers for twelve, while investment trusts extended their buying streak to eleven sessions and had bought a cumulative 1786.53億元. These flows suggest that domestic institutional demand was providing support, but that participation remained uneven.

US equities advanced on Monday, with all four major indexes higher. The S&P 500 gained 0.70%, the Nasdaq rose 0.82%, the Dow Jones Industrial Average added 0.28%, and the Philadelphia Semiconductor Index climbed 2.82%. Nvidia (輝達, NVDA-US), Broadcom (博通, AVGO-US), Micron (美光, MU-US), and Western Digital (威騰電子, WDC-US) moved higher, reflecting renewed interest in AI and memory-related stocks. Reports that AI startup Anthropic had submitted an initial public offering application added to market attention. Anthropic’s first-half revenue was reported at 162.9億美元, approximately 13 times the level of the same period a year earlier.

The article also notes a growing focus on the economics of AI infrastructure. Data-center construction requires substantial capital, and investors are assessing whether the resulting investment can support real sales and earnings growth. Alphabet (GOOGL-US), Microsoft (微軟, MSFT-US), and Amazon (亞馬遜, AMZN-US) were due to report results during the week, while the Federal Reserve was expected to leave interest rates unchanged. Corporate comments on AI spending and profitability, together with the chair’s remarks on inflation and monetary policy, were identified as potential influences on risk appetite. Middle East tensions, oil prices, and inflation could also contribute to market volatility.

Taiwan-related depositary receipts benefited from the US technology rebound. Taiwan Semiconductor Manufacturing Company (台積電, TSM-US) rose 1.40% to 424.37美元; United Microelectronics Corporation (聯電, UMC-US) gained 1.54% to 19.18美元; and ASE Technology Holding (日月光投控, ASX-US) advanced 3.15% to 39.91美元. On the local exchange, TSMC (2330-TW) gained 0.63% to 2400元. AI chip demand and plans to expand advanced packaging capacity remain central to its outlook. The report says CoWoS packaging prices may rise by 1至2成 and some equipment delivery times have lengthened to 6至8個月. It cites an estimated monthly capacity target of more than 13萬片 in 2026 and a goal of 20萬片 in 2027, alongside expansion in Chiayi and Tainan and longer-term plans for a US facility.

Hon Hai (鴻海, 2317-TW) rose 1.02% to 247.5元. Its collaboration with Nvidia on AI-enabled manufacturing uses the Blackwell architecture and DGX supercomputing platform. The report says training a 1,200億-parameter model became 2.48 times faster than previously, and that AI systems have been deployed at more than 200 factories worldwide. Production scheduling time fell 25%, injection-molding engineering workload declined 50%, and the improvement rate for SMT production-line abnormalities exceeded 90%. The company is also combining digital twins, robotics, and AI agents to upgrade factory operations.

MediaTek (聯發科, 2454-TW) fell 1.25% to 3960元 ahead of a scheduled investor briefing on the 30th. Citi estimated fourth-quarter revenue of 2,169億元, up 30% quarter over quarter, and projected that AI ASIC business could contribute more than 20億美元 in 2026. The company is pursuing a TPU v10 project expected to enter production in 2029, using CoWoS or CoPoS packaging. Citi’s EPS estimates for 2026, 2027, and 2028 were 74.94元, 167.76元, and 282.47元, respectively, with a target price of 6,800元. The report stresses that shipment progress and realized earnings still require monitoring.

Memory shares were among the stronger groups. Nanya Technology (南亞科, 2408-TW) rose 6.52%, and Elite Semiconductor Microelectronics Technology (晶豪科, 3006-TW) gained 7.05%; Macronix (旺宏, 2337-TW), Winbond Electronics (華邦電, 2344-TW), and Powerchip Semiconductor Manufacturing (力積電, 6770-TW) also advanced. Demand from AI servers and data centers has renewed attention to memory supply and pricing. The article cautions that individual companies’ prospects still depend on inventory, product mix, and the extent of earnings improvement. Financial shares were comparatively resilient: Taiwan Cooperative Financial Holding (合庫金, 5880-TW) and First Financial Holding (第一金, 2892-TW) reached period highs intraday. Potential consolidation of public-sector investment trusts may help integrate resources, but the resulting operating benefits remain to be demonstrated.

Industrial automation and machine-tool components form another area of interest. The JIMTOF Japan International Machine Tool Fair opened on the 26th, with 94 Taiwanese exhibitors, including HIWIN Technologies (上銀, 2049-TW) and Tongtai Machine & Tool (東台, 4526-TW). Taiwan’s key machine-tool component exports grew 13.1% year over year in the first 9 months. HIWIN’s fourth-quarter orders were described as active, with demand from AI, large infrastructure projects, automation, and semiconductors; some order visibility extended into the second half of next year. Global Transmission Precision (全球傳動, 4540-TW) and Chieftek Precision (直得, 1597-TW) were also expected to maintain strong fourth-quarter orders and shipments.

Supply constraints in China’s linear-guide market may create opportunities for Taiwanese suppliers. The report says some Japanese suppliers were delivering only 15% of originally scheduled orders. HIWIN’s linear-guide order visibility was approximately 4至6個月, while wafer-robot orders covered 半年至一年. Global Transmission had orders extending into the first half of next year and was planning capital expenditure. Chieftek was hiring and expanding capacity in response to CPO-related demand. The companies are also exploring humanoid robots: HIWIN is developing products with a US partner and has begun shipping small ball screws and linear guides; Global Transmission is engaging US robot makers and working with Chinese robot companies and Taiwanese contract manufacturers; Chieftek is developing robot dogs and joint modules.

The report includes two company examples. On 2026.10.16, Tongtai was cited at 34.1 and later 45.15, a gain of 32% after the advance notice. Its exhibition at TPCA Show 2026 featured a high-precision CCD drilling machine and an AMR automated solution for AI server boards and IC substrates. Orders were reported visible through the end of 2027, with capacity fully utilized. On 2026.8.29, Largan Precision (玉晶光, 3406-TW) was cited at 917 and later 1245, a gain of 35% after the advance notice. Its September revenue was 26.72億元, up 0.54% year over year; after-tax profit was 4.34億元, down 15%, and EPS was 3.85元. Third-quarter revenue was 78.12億元, up 37.55% quarter over quarter, with EPS of 9.69元. Revenue for the first 3 quarters totaled 196.31億元, up 10.21% year over year. A planned 3M private placement of 48.12億元 would represent an approximately 4.68% stake, and the companies intend to develop expanded-beam optics for AI-server CPO applications.

In summary, the market’s advance was modest and accompanied by mixed institutional flows, while several AI, memory, and automation-related industries showed stronger activity. The most useful indicators to watch are the conversion of AI investment into earnings, memory supply and pricing, order visibility and deliveries for automation suppliers, and the impact of upcoming corporate results and policy decisions. The industry themes are promising, but the article itself identifies earnings, capacity execution, and market risk as necessary checks before drawing conclusions about sustained performance.

Key Insights Table