AGP Executive Report

Energy Investment: Taiwan says state-owned CPC has made progress on an Alaska LNG deal and plans to invest up to US$4.4 billion, with purchases of 6 million tonnes a year once production starts. President Donald Trump says Taiwan will buy 30% of the project’s output for 20 years, but commercial terms are still under negotiation and the costly pipeline’s viability remains in question. Growth and Exports: The IMF has raised its 2026 growth forecast for Taiwan to 10.7%. President Lai says exports hit a record US$87.72 billion in September, powered by AI demand, and could reach US$900 billion this year. Chip Watch: Investors are bracing for TSMC’s results as a selloff in chip shares spreads, fueled by concerns about Chinese rival CXMT’s memory-chip advances. Industrial Partnerships: Taiwan’s Thunder Tiger and US defense firm AeroVironment will explore unmanned-systems integration and possible co-production in Taiwan. Green Transition: Lai pledged funding and policy support to help businesses cut emissions, as rising AI-related power demand puts energy supply and costs in focus.

Alaska LNG: President Donald Trump says Taiwan will invest US$4.4 billion in the planned pipeline and buy 30% of its gas for 20 years. Taipei has not confirmed the reported commitments, and the deal’s terms remain unclear. Growth & Chips: The IMF lifted its 2026 Taiwan growth forecast to 10.7%, as AI demand fuels exports. But chip stocks have swung sharply amid concerns about Chinese competition and the sustainability of AI spending. Green Transition: President Lai Ching-te says cutting emissions is becoming essential to winning future business orders. The government plans to direct carbon-fee revenue and additional funding to help businesses go green.

Growth Outlook: The IMF more than doubled its 2026 Taiwan growth forecast to 10.7%, the highest in the Asia-Pacific, as AI-chip demand drives exports. Market Pressure: A fresh global tech selloff knocked 960 points off the Taiex, while the U.S. dollar climbed above NT$32. Startup Expansion: Taiwan’s G Camp program took 14 startups to Japan; two firms began a six-month proof-of-concept project with Kyushu University, while another signed a distribution deal. Investment Links: Taipei is working toward a year-end agreement to support Taiwanese investment in Poland, including a proposed technology park. Travel and Trade: Starlux reported a 69% year-on-year rise in September sales, with passenger and cargo revenue both surging on travel and AI-related shipments. Energy Security: Taiwan’s reliance on imported gas remains a risk for industry: reserves cover about 11 days, leaving the power supply exposed to disruptions.

Market Jitters: Taiwan shares fell about 2% as an AI-led chip selloff spread across Asia. Investors are questioning whether exceptional AI profits can last as Chinese memory maker CXMT narrows the technology gap. Growth Outlook: The IMF raised Taiwan’s 2026 growth forecast to 10.7%, the highest in the Asia-Pacific region, citing the AI boom. Taiwan and South Korea account for 62% of net trade in AI-related computing hardware, leaving growth exposed to shifts in demand and competition. Memory Boom: Taiwan’s Nanya Technology reported a record 85.7% gross margin for the third quarter as AI demand tightens memory supply; it expects DRAM prices and margins to rise further in Q4. TSMC Watch: Investors expect the chipmaker to post a sixth straight record-profit quarter, with earnings due this week. APEC: Finance Minister Chuang Tsui-yun will attend next week’s APEC finance ministers’ meeting in Hong Kong, one of the few international forums Taiwan joins.

TSMC’s AI Surge: Taiwan Semiconductor is expected to post a sixth straight quarterly profit record on Oct. 15, after reporting record third-quarter revenue as AI demand accelerates. September sales rose 54.6% year over year. Custom AI Chips: Microsoft plans to deploy its Maia chips at scale from 2027 to reduce reliance on Nvidia; TSMC will manufacture key components using advanced 2-nanometer and 3-nanometer processes. Power Constraints: Taipower’s chief says private investment in generation is needed as AI data centers add pressure to Taiwan’s electricity supply. Trade Probe: A U.S. investigation involving Taiwanese tech companies, including Foxconn, Delta and Quanta, adds uncertainty for manufacturers even as the AI boom drives record exports.

U.S. Patent Probe: Foxconn is among 20 companies named in a U.S. investigation into alleged patent violations involving power systems and computing devices. The probe has not reached a decision on the merits. TSMC Earnings: TSMC is expected to post a sixth straight quarterly profit record, powered by AI-chip demand; third-quarter revenue reached NT$1.49 trillion, up 50% from a year earlier. AI’s Wider Reach: Taiwan’s AI boom is lifting business travel and luxury spending, with Formosa International Hotels’ Steven Pan forecasting record revenue and profit this year. Beyond EVs: ProLogium is targeting AI data centers and aerospace as slower electric-vehicle demand prompts solid-state battery makers to seek new markets.

U.S. Trade Probe: The USITC has opened a patent investigation into power-delivery systems used in AI servers, naming Hon Hai, Delta Electronics and Quanta among 20 companies. Taiwan’s economy ministry says it will assist; the commission has made no ruling on the claims. AI Chip Boom: TSMC reported record third-quarter revenue of NT$1.49 trillion as AI demand surged. Taiwan’s September exports also hit a record, extending growth to 35 months. Power and Innovation: Taiwan is weighing a return to nuclear power as AI drives electricity demand. The new European Chamber of Commerce Taiwan chair also urged greater agility in software and energy, pointing to room to build on the island’s hardware strengths. Battery Shift: ProLogium is looking beyond electric vehicles toward AI and other uses, as slow EV sales and high costs cloud the sector’s outlook.

Chip Sector: AI revenue concerns have pulled semiconductor stocks back from October highs, while a potential strike at Micron’s Taoyuan plant adds supply-chain risk. TSMC, meanwhile, posted record quarterly revenue as AI demand surged and struck a US$2 billion packaging supply deal with GlobalFoundries. Growth and Investment: President Lai says Taiwan’s economy could grow more than 11% this year, while urging stronger links with Silicon Valley for technology, talent and investment. Trade Ties: Taiwan–India trade has surged 60% as technology and investment ties deepen. The European Parliament also backed closer economic and technology cooperation with Taiwan, rejecting Beijing’s efforts to limit the island’s international participation.

Economic Outlook: President Lai said Taiwan’s economy could grow more than 11% this year, but called for a broader “chain of guardian mountains” so growth reaches more industries and supply chains take deeper root at home. AI Chips: TSMC posted record quarterly revenue as AI demand surged, and Taiwan’s shares pulled ahead of South Korea’s amid the chip boom. US Supply Chain: TSMC and GlobalFoundries struck a $2 billion deal to supply silicon interposers for AI chips in the United States. Labor Watch: Micron workers in Taoyuan won authorization to strike over bonuses, raising uncertainty for a key memory-chip operation. Investment Links: Former president Tsai Ing-wen urged stronger Taiwan–Silicon Valley ties in technology, talent and investment; Taiwan–India trade has also surged 60% as business links deepen.

Economic Outlook: President Lai Ching-te called for a “chain of guardian mountains” across industries, arguing Taiwan must broaden its economic strengths beyond its chip champion. He cited 14.15% first-half growth and said full-year growth could top 11%, while flagging tariff, energy and supply-chain challenges. AI Chips: TSMC reported record third-quarter revenue above US$46 billion, up 50% year on year as AI demand surged. In a US$2 billion, five-year deal, TSMC will have GlobalFoundries make silicon interposers in New York from 2028, adding a US supply source for AI packaging while final assembly remains largely in Taiwan for now. Industry Priorities: New European Chamber of Commerce Taiwan chair Frank Grunert urged greater agility in software development and energy infrastructure, saying Taiwan can build on its hardware expertise and engineering talent. Household Spending: The government plans a roughly US$300 cash payment before Lunar New Year, funded by a tax surplus boosted by technology exports; the opposition is seeking a larger payout.

Enterprise AI: Taiwan’s Senao Networks launched a new x86 server lineup for generative AI, inference and edge computing, with on-premises options for companies seeking more control over data. Chip Supply Chains: TSMC and GlobalFoundries signed a $2 billion, five-year deal to make silicon interposers in New York, with production planned from 2028. TSMC also posted record third-quarter revenue of $46.71 billion as AI demand surged. Trade and Exports: Taiwan’s exports topped US$87 billion in a record month, extending their growth streak to 35 months, led by technology demand; trade with India is also rising, up 60% in a recent report. Supply Risks: Micron workers in Taiwan authorized a strike amid tight AI-memory supplies, raising concerns about disruption to chip output and downstream electronics.

Semiconductors: TSMC posted record third-quarter revenue of US$46.71 billion, up 51% year on year, as AI chip demand beat forecasts. The company also announced a US$2 billion manufacturing agreement with GlobalFoundries. Trade: Taiwan’s exports topped US$87 billion in September, a monthly record and the 35th straight month of growth, powered by demand for AI-related products. Chip Workforce: Micron workers in Taiwan approved a strike amid a dispute over profit-sharing, adding labor risk as the AI memory boom tightens supply. Market Watch: Asian shares slipped as investors questioned whether massive AI spending can deliver returns, while high oil prices and bond yields added pressure. Taiwan’s growing AI power needs are also reviving debate over a return to nuclear energy.

Export Surge: Taiwan’s September exports hit a record US$87.22 billion, up 60.9% year over year, extending growth to 35 months. The Finance Ministry says strong AI and electronics demand could push full-year exports above US$900 billion. TSMC Momentum: TSMC posted record third-quarter revenue of US$46.71 billion, up 51%, as AI chip demand continued to fuel growth. Power Supply: Taiwan is weighing a restart of the Maanshan nuclear plant, potentially by 2028, as AI and semiconductor factories drive electricity demand and energy-security concerns grow. Chip Industry Labor: Micron’s Taoyuan union won authorization to strike over bonuses, raising a new labor risk for Taiwan’s semiconductor supply chain.

Chip Boom: TSMC reported record third-quarter revenue of NT$1.49 trillion, up 50% year on year and ahead of forecasts, as AI demand drives growth. Labor Watch: Micron’s Taoyuan union won authorization to strike over bonuses. A walkout could threaten output at a site that accounts for 60% of the company’s global production capacity. AI Infrastructure: Fitch says electricity availability, not chip supply, may limit Taiwan’s data-center growth, with grid constraints already holding back some large power requests. U.S. Expansion: Taiwan supplier Gudeng has opened its first U.S. manufacturing facility in Arizona, strengthening its presence near the growing American chipmaking base. Costs and Markets: Taiwan shares have hit record highs on AI optimism, while inflation has reached its highest level since February 2024.

U.S. Investment: Taiwan opened a representative office in Phoenix as TSMC builds out its Arizona complex, with planned investment of up to $265 billion. Chip Supply: AMD expects a substantial increase in chip supply in 2027 and says it is planning capacity three to five years ahead as AI demand outpaces production. Labor Risk: Nearly all Micron union members who voted in Taoyuan backed strike authorization over profit-sharing, raising supply-chain concerns; no walkout date has been set. Inflation: Taiwan’s annual CPI rose 2.73% in September, its highest rate since February 2024 and above the central bank’s 2% target. Market Rally: TSMC shares hit a record as investors bet on sustained AI-chip demand and further earnings growth.

Energy & Markets: Oil jumped again as Iran-linked attacks raised fresh Strait of Hormuz fears, pulling Asian stocks lower even after Wall Street’s AI-led record run. Semiconductors & AI Supply Chain: Intel said it will keep working with Elon Musk on Terafab despite reports that TSMC is exploring cooperation—an uncertainty that rattled Intel shares while TSMC hit a record. Taiwan-US Business Ties: A U.S. congressional delegation met Taiwan’s President Lai to discuss trade, tech and regional security, while AmCham Taiwan marked its 75th anniversary pledging closer Taiwan-U.S. investment. Taiwan’s Energy Budget Pressure: Taiwan’s government is preparing nearly NT$415 billion to stabilize Taipower, CPC and fuel suppliers as CPC losses mount and insolvency risk grows. Local Economic Outreach: Taiwan opened a Phoenix representative office to expand Arizona ties and services for Taiwanese firms and nationals, drawing China’s objections. EU Security Debate: The European Parliament is set to vote on calls for greater naval presence in the Taiwan Strait, a move likely to face resistance. Power Infrastructure Deal: LS Electric signed a Taiwan-focused joint venture with Formosa Plastics affiliates to bid for power grid projects, expanding beyond equipment supply.