NAND flash prices have increased dramatically. Supply and demand are unlikely to ease this year as AI technology giants and large cloud service providers (CSPs) aggressively purchase high-capacity SSDs. At the same time, a severe shortage of fiberglass cloth has also emerged, which is expected to push SSD controller prices upward as well. The NAND shortage will be severe enough to set new record highs for market prices, potentially creating five major challenges for controller manufacturers, who must accelerate their strategies to compete in AI and enterprise server markets.
Tesla aims to shorten its in-house AI chip design cycle to one generation every nine months, targeting rivals Nvidia and AMD. However, industry analysts highlight automotive safety verification and software stability as the biggest bottlenecks.
Geopolitics has become an unavoidable force shaping business decisions in 2026. Shifting tariff policies under President Donald Trump have pushed global supply chains away from pure globalization and toward regional and localized production. While Washington has repeatedly called for manufacturing to return to the United States, executives across the industry say the economic and structural obstacles remain formidable.
With shipments of application-specific integrated circuits (ASICs) and XPUs expected to rise sharply in 2026, AI accelerators are set to continue relying on fifth-generation high-bandwidth memory, or HBM3E. Micron said at a recent earnings call that while demand for sixth-generation HBM4 is strong, it is also responding to additional growth in HBM3E demand.
Taiwan Surface Mounting Technology Corp. said revenue returned to growth in 2025 after two consecutive years of decline, though rising prices and tight supply of key components are expected to weigh on overall end-market demand. The surface-mount technology provider said it remains cautious on consumer electronics while seeing clearer growth momentum in DRAM modules and automotive applications in 2026.
The US and Taiwan have reached a trade breakthrough that lowers reciprocal tariffs to 15% and applies most-favored-nation treatment without stacking, creating new momentum for Taiwanese technology companies to expand manufacturing and supply chain operations in the US. The agreement also formalizes a strategy known as the "Taiwan model," aimed at building localized industrial clusters rather than isolated overseas factories.
Industry speculation about collaboration between optics manufacturers and semiconductor companies to bolster their silicon photonics (SiPh) capabilities is gaining ground. Following Largan Technology chairman Enping Lin's comments during a recent earnings call, Asia Optical chairman I-Jen Lai confirmed that Asia Optical is also a potential participant in this trend.
Yageo, a major Taiwanese manufacturer of passive components, has informed customers it will raise prices on specific chip resistors (R-Chip) products starting February 1, citing escalating costs of silver, ruthenium, and palladium. The increase follows prior hikes in related components by Yageo subsidiaries KEMET and Pulse.
Below are the most-read DIGITIMES Asia stories of the week of January 12-18, 2026.
The US and Taiwan have formally concluded a tariff agreement that sets a 15% rate on covered goods, alongside a sweeping package of Taiwanese commitments aimed at deepening ties with the American semiconductor industry. Under the deal, Taiwan will make US$250 billion in direct investment in US semiconductor manufacturing, while its government will provide an additional US$250 billion in credit guarantees.
Acer and Lenovo are optimistic about India's consumer electronics sector as the global market slows due to rising memory prices.
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