ITRI: AI Drives Concurrent Expansion Across Taiwan's Electronics Supply Chain

Artificial intelligence has entered a fourth phase of growth, generating simultaneous momentum across both upstream and downstream segments of Taiwan’s electronics industry, according to the Industrial Technology Research Institute (ITRI). The institute notes that Taiwan’s export performance is now being supported by overlapping effects from AI’s second and third development waves.

Over the past year, competition among large AI models has centred on performance, pricing benchmarks, upgrade cycles, and the deployment of AI agents. At the same time, upstream supply chains have pushed forward open-source models, computing platforms, and server architectures, shifting the emphasis from raw capability to deployment efficiency and return on investment.

As leading chipmakers introduce new platforms, alongside advances in liquid cooling, inference offloading, and 800-volt high-voltage direct-current (HVDC) server designs, critical components and modules remain heavily concentrated in Taiwan. This has strengthened the role of local firms in collaborative research and development, as well as in system integration.

Practical downstream applications are also featured at CES 2026. The event organizer, Consumer Technology Association (CTA), identified “personal productivity” and “hours saved” as the most visible measures of AI performance indicators. Industry leaders are combining digital twins, automation, and domain expertise to embed AI directly into chip design and manufacturing processes.

In consumer markets, home electronics brands are evolving from hardware suppliers into service-oriented “home companions” for smart homes. LG, for instance, is integrating service robots with its appliance ecosystem to create cross-device synergies. Others are partnering with Google’s Gemini AI to connect televisions, home appliances, and mobile devices through real-time, personalized agent services. Interest in quantum computing and cross-device architectures is also growing, accelerating new forms of human–machine collaboration at home and in the workplace.

ITRI noted that as AI platforms mature rapidly, tech companies hold a near-monopoly on system integration. Beyond the immediate boost to exports, Taiwanese companies will need to increase co-development with international partners through cross-industry integration, multi-device applications, and proactive AI agents to secure their position in the global value chain.