Sat, Apr 18, 2026 page1

• Taiwan critical to AI hardware resilience: report

  • By Esme Yeh / Staff reporter, with CNA
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  Taiwan’s importance is rising as a key to artificial intelligence (AI) hardware resilience, with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) holding the lifeline of the global AI hardware supply chain, according to this year’s AI Index report released this week by Stanford University’s Institute for Human-Centered AI.

  Compared with previous editions, which largely treated Taiwan as part of broader statistical listings, the latest report places greater emphasis on Taiwan’s economic data and its critical role in global supply chains.

  While the US had a total of 5,427 data centers last year, more than 10 times any other country, nearly all cutting-edge AI chips are manufactured by a single company — TSMC, the report said.

  

  A representation of Taiwan on a motherboard is pictured in an undated illustration.

  Photo: CNA

  More than 90 percent of leading AI models are concentrated in the industrial sector, it said.

  Since 2022, the computational power of these models has grown at an average annual rate of about 3.3 times, reaching the equivalent of roughly 17.1 million Nvidia H100 graphics processing units (GPUs), it said.

  Nvidia accounts for 60 percent of the total computing power, followed by Google and Amazon, with Huawei (華為) in China contributing a small share, the report said.

  However, nearly all of this computing power depends on a single semiconductor foundry in Taiwan, highlighting Taiwan’s critical role in the global AI hardware supply chain, as well as the vulnerability of that supply chain, it said.

  Companies such as Nvidia and SK Hynix provide designs that are manufactured by TSMC and Samsung Electronics using advanced processes, it said.

  Once completed, the AI chips are sent to companies such as Taiwan’s ASE Technology Holding Co (日月光) and US-based Amkor Technology for packaging and testing, the report said.

  TSMC is a single point of dependency in the global AI supply chain, as it manufactures nearly all advanced AI chips, including Nvidia’s Blackwell GPUs and AMD’s MI300X, the report said.

  Each stage of the supply chain involves high technical barriers, requiring decades of accumulated expertise, specialized equipment and massive capital investment to overcome, it added.

  Taiwan had an AI diffusion rate of 28.4 percent in the second half of last year, the report said.

  Compared with the previous year, global industrial robot installations remained flat in 2024, it said.

  Some major markets, including the US, Germany and Italy, recorded declines, but Taiwan was an exception, which posted a 33 percent year-on-year increase — the highest in the world, it said.

  The report also compared the performance of AI models from the US and from China, saying the US-China AI model performance gap has effectively closed.

  The US and Chinese models have traded the lead multiple times since the beginning of last year, it said.

  While China’s DeepSeek-R1 briefly matched the top US model in February last year, the top model manufactured by Anthropic of the US led by only 2.7 percent as of last month, it said.

  US private AI investment reached US$285.9 billion last year, more than 23 times the US$12.4 billion invested in China, the report said.

  However, China’s US$12.4 billion investment might be an underestimate, as it only included private investments and did not take into account the Chinese government’s funding for AI, the report said.
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