Reported By Lee, Chen-Li（Daniel）李振麟
Mrgan Stanley said in its latest outlook that while the market continues to debate the long-term trajectory of artificial intelligence (AI), growth momentum for 2026 is increasingly clear, with visibility extending into 2027. AI-driven computing demand remains virtually unlimited, continuing to support processors and AI-focused semiconductors. In the next phase, this demand is expected to lift memory chip consumption and improve wafer-fab capacity utilization, allowing bullish sentiment to spread from core AI chips to the broader semiconductor supply chain.
The firm noted that semiconductor industry growth is shifting from a single-segment rally toward a more structural and diversified expansion, driven by AI applications across multiple layers of the ecosystem.
At present, U.S. equity indices remain heavily weighted toward processor-related stocks, with AI semiconductors dominating market discussions for a third consecutive year. While inventory digestion and cyclical adjustments are likely to occur along the way, Morgan Stanley emphasized that the overall upward cycle remains intact.
Recent strength in European semiconductor stocks reflects improving investor risk appetite. Market sentiment has been supported by potential cooperation between Oracle and TikTok, which could boost demand for cloud services and data security solutions. As a result, shares of European semiconductor equipment makers and chip manufacturers have broadly moved higher.
The ongoing AI boom is also extending the traditional semiconductor cycle, which typically lasts around four years. Analysts expect continued investment in AI servers and data centers to sustain memory chip demand through 2026, keeping prices relatively firm in the near term.
In contrast, while China has accelerated the construction of new foundries over the past two years, future expansion is likely to slow due to cash-flow constraints. Semiconductor manufacturers worldwide are increasingly expanding overseas to mitigate geopolitical risks. Despite subsidies and tariff incentives offered by Europe and the United States, Asia remains the most cost-efficient and scalable manufacturing base. Research firms widely view TSMC as one of the primary beneficiaries of the global AI wave.
Beyond semiconductors, the industrial computer (IPC) sector is also showing clear signs of recovery. The global IPC market rebounded strongly in the first half of 2025, with Taiwanese vendors posting double-digit revenue growth. Excluding major players such as Advantech and Ennoconn, mid-sized IPC suppliers recorded revenue growth approaching 30%, indicating healthier inventory levels and a broad-based demand recovery.
However, currency fluctuations and uncertainties surrounding U.S.–China trade tariffs remain potential risks for future orders.
According to DIGITIMES, growth for Taiwanese IPC vendors is being driven primarily by semiconductor capacity expansion and the adoption of edge AI. In the short term, manufacturing automation and edge AI applications remain key growth engines. Over the longer term, Taiwanese IPC companies are expected to maintain strong global competitiveness, supported by their strengths in customization, system integration, and AI-enabled solutions.