As 2025 draws to a close, the global semiconductor industry has undergone a fundamental transformation marked by heightened geopolitical tensions, supply chain restructuring, and an unprecedented surge in AI-driven demand. What distinguishes this year from previous cycles is the shift from aspirational roadmaps to hard-edged execution, where manufacturers must deliver not just technological advancement but reliable, scalable production under increasingly complex constraints.

Facing US restrictions on high-end computing products, China is restructuring its AI chip industry by advancing GPU, TPU, and NPU technologies simultaneously. Domestic firms struggle to match Nvidia's software ecosystem but seek breakthroughs with TPUs for efficiency and NPUs for edge applications.

Taiwan Mobile's AI data center (AIDC) in Guishan in northern Taiwan is already fully leased after it officially began operations in the fourth quarter of 2025, according to the company's president, Jamie Lin. The company expects the AIDC to start contributing revenue from January 2026, with profitability achievable within its first year of operation.

Amid ongoing US export restrictions, Chinese company Zhonghao Xinying plans to launch its second-generation self-developed Tensor Processing Unit (TPU) chip in 2026. Industry observers predict multiple new Chinese TPU firms will emerge over the next five to 10 years, driven by growing demand for AI inference computing.

As 2025 concludes, Taiwan's information and communication technology (ICT) and electronics sectors have experienced significant export growth driven by AI-related demand, particularly from the United States. This comes according to the Ministry of Economic Affairs (MOEA). Despite record-breaking trade surpluses and rising foreign-exchange earnings, industry surveys indicate varying confidence about future prospects.

Infineon is leveraging its technological strengths to expand into cutting-edge applications in AI data centers and robotics. The company is currently collaborating with Nvidia to develop power systems for next-generation AI racks, featuring direct current (DC) voltages up to 800V.

Foxconn's operating structure is clearly shifting. Previously driven mainly by consumer electronics cycles, it is now gradually tilting toward AI servers, cloud, AI infrastructure, and high-performance computing (HPC). With continued investment and deployment in emerging businesses such as electric vehicles (EVs), results are expected to surface in 2026.

Set-top box maker Skardin Industrial confirmed that it has recovered a portion of its bad debt from an Argentine client, recognizing approximately NT$110 million (US$3.5 million) in bad-debt reversal gains, which have significantly strengthened operating cash flow. The company plans to continue advancing its transformation strategy, focusing on green energy, internet data centers (IDC), and resilient communications modules as its next growth engines.

Data centers are entering a new phase of infrastructure upgrades in 2026, feeding off generative AI under Nvidia's leadership. While silicon photonics (SiPh) and co-packaged optics (CPO) technologies are still in the deployment stage, the optical communications industry is expected to move into commercialization by 2026.

In 2025, the global electronics supply chain transformed due to rising demand for artificial intelligence (AI) and high-performance computing (HPC), boosting servers, chips, and cooling sectors. Geopolitical tensions, export controls, and multi-location approaches also reshaped the supply chain to improve flexibility and risk management. The DIGITIMES Asia news team has summarized the top 10 key developments from this shift.

Taiwanese pneumatic components maker Chelic said it is redirecting its growth strategy toward semiconductors, liquid cooling, and robotics, as new sensing and energy management products move into customer testing with revenue contributions expected to begin in early 2026.

The space industry is undergoing a profound transformation. What was once the domain of government agencies has become a strategic battleground. Commercial innovation, military priorities, and economic competition now converge beyond Earth's atmosphere.

Rising global investment in artificial intelligence is accelerating data center construction. This is intensifying demand for power, cooling, and energy storage equipment, reinforcing reliance on Chinese-made components even as governments push to diversify supply chains.

Solid oxide fuel cells (SOFCs) are drawing significant attention because of their flexible and rapid deployment capabilities as AI's electricity demand continues to skyrocket. Kaori Thermal Technology, a key supplier to SOFC fuel cell leader Bloom Energy, stated that customer demand remains strong, enabling both capital and workforce expansion. The company said its 2026 capex will be the largest since its founding, and its headcount is set to increase by more than 40%.

Gallium nitride power devices are rapidly penetrating AI data centers as soaring electricity demand forces operators to rethink power efficiency and density. The shift is pushing US and European power semiconductor suppliers to accelerate partnerships and product development.

Chunghwa Telecom (CHT) is expanding its AI and infrastructure footprint by establishing a shared AI exhibition space and research and development office at Kaohsiung's Pier F on December 22, 2025. The company will also assist Kaohsiung in building Taiwan's first city-level generative sovereign AI demonstration base.

Taiwan's Ministry of Economic Affairs (MOEA) announced on December 23, 2025, that export orders from the US reached US$28.45 billion in November 2025, up 12.5% sequentially and 56.1% year-over-year. Orders for information and communications products, focused on artificial intelligence (AI) servers, rose by US$6.43 billion, marking a sharp year-over-year increase of 117.7%.

The rapidly increasing electricity demand from global artificial intelligence (AI) data centers is placing significant pressure on power grids worldwide. Chinese battery, energy storage, and transformer manufacturers are well-positioned to benefit from their technological expertise, cost efficiency, and rapid delivery capabilities. As data center operators seek solutions to upgrade aging power infrastructure, the reliance on Chinese suppliers is growing sharply.

The rapid growth of generative AI and large-scale models has significantly increased power consumption in computing chips, pushing thermal management into critical focus. High-end AI accelerators now consume power at kilowatt levels, producing concentrated heat fluxes that challenge existing cooling methods, potentially limiting performance and reliability across data center systems.

Techman Robot has announced an expanded technical partnership with CSBC Corp. to develop AI-driven collaborative robots (cobots) tailored for narrow-space welding tasks in the shipbuilding industry. The collaboration centers around Techman's new lightweight TM3 AI cobot equipped with native AI vision technology.

ByteDance is preparing to raise its capex to CNY160 billion (approx. US$22.70 billion) in 2026, allocating over half of this amount, CNY85 billion, towards purchasing artificial intelligence chip processors, according to sources cited by the Financial Times. The planned increase from CNY150 billion in 2025 reflects ByteDance's intensified emphasis on AI development.

Chinsan, a Taiwanese aluminum capacitor manufacturer, held an in-person investor briefing on December 22, 2025. General manager Ching-Hsin Chiang said that growth momentum in the first half of 2026 will be driven mainly by the cloud and server markets, which are expected to show strong positive trends extending into 2027. In contrast, consumer electronics, industrial automation, and new energy sectors are forecasted to remain flat or slow down.

Taiwan's major automation equipment controller maker Syntec Technology has begun construction of its second-phase factory in Malaysia, representing a strategic investment of over NT$600 million (approx. US$19 million). The new facility aims to serve as the firm's key overseas manufacturing and operation hub, supporting markets including India, Turkey, ASEAN, and the US.

Alphabet has agreed to acquire Intersect, a provider of data center and energy infrastructure solutions, in a cash deal valued at US$4.75 billion plus the assumption of debt, the company said on December 22, 2025. The transaction is expected to close in the first half of 2026, subject to customary regulatory and closing conditions.