Rapid AI adoption is accelerating semiconductor growth and shifting demand toward advanced logic, high-end memory, and advanced packaging.
Taipei, April 29, 2026 —On the second day of MIC FORUM Spring 2026, the Market Intelligence & Consulting Institute (MIC), Institute for Information Industry, focused on semiconductor innovation and the evolution of AI computing infrastructure, highlighting how advances in chips, memory, and data center systems are reshaping the industry landscape.
As AI deployment accelerates, demand is becoming increasingly concentrated in high-performance computing platforms, placing particular pressure on advanced memory technologies.
Supply constraints continue to weigh on advanced Dynamic Random-Access Memory (DRAM) and High Bandwidth Memory (HBM). Cleanroom capacity, equipment availability, materials sourcing, through-silicon via (TSV) processes, and advanced packaging all present bottlenecks that are limiting near-term expansion. Despite ongoing investment across the industry, new capacity takes considerable time to come online. It moves sequentially through construction, installation, yield ramp-up, and customer validation before contributing to supply.
This tightening supply comes amid surging demand. “As AI servers scale, enterprise adoption deepens, and sovereign AI initiatives gain traction, demand is shifting away from fragmented end markets toward a more structural, high-performance computing-driven growth model,” said Cynthia Yang, Senior Industry Analyst at MIC. Tight supply and elevated pricing are unlikely to ease soon and are expected to persist through the second half of 2027.
Next-generation memory gains momentum
“As AI applications expand, both mainstream and emerging memory technologies are gaining traction, with hybrid configurations improving data access efficiency,” said Kai-An Cheng, Industry Consultant at MIC. “Key technologies include HBM, customized compute memory, and high-bandwidth flash (HBF), with HBM4 expected to enter mass production in 2026 and deliver significantly higher capacity and bandwidth.”
Cheng added that emerging memory technologies more broadly are moving closer to commercialization, as both Integrated Device Manufacturers (IDMs) and foundries invest in production capabilities. While challenges remain, their ability to combine DRAM-like speed with non-volatile storage gives them strong potential in next-generation memory.
Server industry shifts toward AI data center integration
Strong capital spending by major cloud service providers (CSPs) continues to fuel growth in the global data center market. MIC projects CSP spending will grow by 58.1% in 2026 and 14.2% in 2027, extending the strong momentum seen in 2025.
“AI inference is entering a phase of rapid expansion, prompting leading players to refocus computing strategies on inference workloads,” said Chris Wei, Industry Consultant at MIC.
AI model developers and sovereign AI initiatives are actively building large-scale AI data centers (AIDC), driving demand for servers and infrastructure and creating growth opportunities for Taiwan’s supply chain. However, this rapid expansion is also exposing growing constraints in data center power and cooling infrastructure.
Power and cooling become critical challenges
AI systems with large memory capacity and fluctuating workloads are straining existing power architectures, making battery backup units (BBUs) essential.
The industry is exploring high-voltage direct current (HVDC), with 800V DC expected to gain traction by 2027, while solid-state transformers (SST) aim to improve efficiency.
New power solutions include solid oxide fuel cells (SOFC) and modified jet engines used as generators, enabling more independent data center operation.
Next-generation technologies such as small modular reactors and commercial nuclear fusion are also gaining support.
Cooling presents another major challenge for data centers
“Data centers are reducing reliance on cooling water through improved liquid cooling, new coolants, and closed-loop systems, while exploring designs such as floating and orbital data centers,” said Szu-Wei Kuo, Industry Analyst at MIC. “Taiwan firms are also advancing capabilities and investing in technologies including BBU, HVDC, SOFC, and SST.”
Network infrastructure faces growing demands from AI workloads
“The data center switch market is projected to reach USD 57.3 billion by 2030, with a CAGR of 16% from 2025 to 2030,” said Tzu-Ming Hsu, Senior Industry Analyst at MIC. He added that AI-driven demand is accelerating upgrades, with 800G expected to become mainstream by 2026 and 1.6T by 2028.
Hsu noted that major ICT companies are actively entering the data center switch market, led by Arista, Cisco, and NVIDIA, alongside white-box vendors such as Accton and Celestica.
White-box market share is projected to grow from 20% in 2024 to 47% by 2030. Taiwanese firms are well-positioned to capture this momentum: beyond equipment assembly, they have cultivated deep expertise across critical sub-sectors, including optical components, thermal management, high-end printed circuit boards (PCBs), and copper clad laminates (CCL). As AI infrastructure spending accelerates globally, these capabilities place Taiwan at the center of the supply chains powering the next generation of technology leaders and AI innovators.