Physical AI and artificial general intelligence are expected to create new end-market opportunities as component supply constraints persist through 2028
Taipei, September 8, 2026 —The Market Intelligence & Consulting Institute (MIC), a division of Taiwan’s Institute for Information Industry, today released its 2027 ICT industry outlook at the 2026 MIC FORUM Fall, themed “AI Leap,” taking place from September 8 to 10.
"Global tech giants and government agencies are accelerating AI infrastructure deployment, while the prolonged US-China technology rivalry is bifurcating supply chains. We expect supply-demand imbalances in high-bandwidth memory (HBM), DRAM, Ajinomoto build-up film (ABF) substrates, ABF build-up films, and high-end copper-clad laminates (CCL) to persist. NAND flash is the only major category likely to see easing by the end of 2027, while constraints in the other categories may continue into 2028, limiting component availability for consumer products,” said Edward Lin, Senior Industry Consultant and Deputy Director General at MIC.
Over the medium to long term, Physical AI and Artificial General Intelligence (AGI) are expected to drive the next wave of business opportunities. On the application side, development will center on “five-sense cognition,” including technologies such as spatial and depth sensing. On the infrastructure side, computing buildout will emphasize “performance integration,” including edge AI chips, high-voltage direct current/solid-state transformer (HVDC/SST) power optimization, and all-optical networks.
ICT: Servers and data centers anchor 2027 shipment growth
MIC's 2027 forecast points to servers and the broader data center supply chain as the primary driver of ICT growth.
Global server shipments are projected to reach 18.6 million units in 2027, representing 12.4% year-on-year growth. AI server shipments are forecast to rise 17.8% to 5.4 million units.
By contrast, major consumer-device categories are forecast to contract: notebook shipments are expected to decline 4.7% to 160.0 million units, while smartphone shipments are projected to fall 2.3% to 1.048 billion units.
Home customer-premises equipment (CPE)—including Wi-Fi routers, wired broadband devices, and 5G fixed wireless access (FWA) equipment—is expected to maintain steady annual growth of 2–5%. Meanwhile, switch output value is projected to increase 12.3%, supported by continued data-center expansion.
Supply chains: Regional diversification takes hold
Taiwan-based manufacturers have largely completed the transition to more diversified, regional production footprints.
Server and networking capacity continues to shift toward Southeast Asia, Mexico, and the United States. Notebook and smartphone production is being redistributed primarily to Southeast Asia and India.
"The multi-region supply chain structure for global ICT products is now broadly established," Lin said.
In semiconductors, approximately 80% of Taiwan-based manufacturers’ production capacity is expected to remain in Taiwan through 2030.
Four new terminal markets emerge as USD 10 billion opportunities
Beyond traditional ICT categories, MIC identifies four AI-driven products with potential to reach USD 10 billion-scale markets by 2028: AI Box, Agent PC, mobile robots, and AI glasses.
As edge AI adoption expands across enterprise operations and is expected to reach 40–50% by 2028, the AI Box market is projected to reach USD 19.7 billion. This growth is expected to reshape opportunities for industrial PC (IPC) vendors and chip startups.
Agent PCs are expected to evolve beyond today’s AI PC concept by enabling more on-device inference and operation across multiple use scenarios. For enterprises, this could provide an alternative means of managing token-related cloud AI costs.
Mobile robots are forecast to see large-scale deployment across manufacturing environments by 2028, reaching a market size of USD 15.9 billion. Bipedal and wheeled humanoid robots remain at an early stage of development. However, the humanoid-robot segment is projected to surpass autonomous mobile robots (AMRs) in market scale by 2032.
AI glasses are emerging as a leading candidate for next-generation personal-assistant devices. Their mass-market adoption will depend largely on attractive industrial design and accessible pricing.
Outlook: Taiwan's positioning in the AI value chain
As a core node in the global AI chip and infrastructure supply chain, Taiwan should capitalize on AI-driven demand to strengthen its manufacturing advantages and upgrade its industrial structure, Lin said.
On the industry side, players should integrate the AI data center (AIDC) ecosystem, moving beyond existing hardware manufacturing to co-create alongside international cloud service providers (CSPs) and chip vendors. This positioning would consolidate first-mover advantages and build capabilities in AIDC total solutions and cross-border sovereign AI deployment.
In response to geopolitical risk, Taiwan should expand investment in "trusted" and "green" supply chains. This includes addressing national security-sensitive product requirements from major countries through co-development with local partners — beginning with subsystem-level entry and gradually broadening the supply base — and accelerating next-generation energy and circular materials capabilities to align with EU and US sustainability standards.
To address concerns over K-shaped economic divergence, Lin recommends government mechanisms guided by the principle of “large firms supporting small firms, and small firms strengthening large firms.
This includes leveraging senior industry experts to help identify or upgrade SME technical capabilities, and co-investing with technology firms in local supply chain players with the potential to transform amid the current shift.