Cathay SITE held the "From Silicon Valley to Silicon Island: Investment Map in the AI Era" forum on November 4 during Taiwan Week, opened by Cathay SITE Chief Investment Officer Zheng Licheng, Daiwa Securities Senior Managing Executive Officer Naoki Suzuki and Daiwa-Cathay Securities President Takeshi Mitsuda, followed by presentations from Daiwa Korea technology industry expert Sung Kyu Kim, Cathay SITE Taiwan-Korea technology expert Hanlin Li, Taiwan semiconductor expert Qiuwen Huang and Cathay SITE fund manager Enyi Liang, extending from international industry research to practical investment strategies.
Memory Takes Center Stage as Korea Enters New Growth Cycle
Daiwa Korea technology industry expert Sung Kyu Kim noted that AI development is expanding from model training to inference, agentic AI and physical AI, with memory becoming a key determinant of system performance. As AI chips continue to upgrade, demand for HBM capacity and bandwidth is rising in tandem, and future AI agents will need to handle longer dialogue context and perform more complex tasks, further boosting demand for DRAM and NAND.
Microsoft, Amazon, Meta and Google continue to expand AI capital expenditure, Samsung expects tight memory supply to continue into 2028, while demand visibility for SK Hynix DRAM and HBM capacity extends to 2029. Cathay SITE Taiwan-Korea technology expert Hanlin Li said that as chip scaling approaches physical limits and Moore's Law slows, DRAM process upgrades are becoming more difficult, while high-layer stacking for HBM and NAND also increases manufacturing complexity and expansion costs, likely sustaining the tight memory supply-demand balance. Korea holds a leading advantage in the memory industry, while Taiwan commands advanced processes, advanced packaging and the AI server supply chain, making the two technology industries highly complementary, with the Cathay Taiwan-Korea Tech ETF, ticker 00735, covering tech companies in both markets.
Advanced Packaging and Optical Communications Take the Baton as System Opportunities Expand
Cathay SITE Taiwan semiconductor expert Qiuwen Huang said that as AI moves from data centers to edge applications, industry demand is expanding from GPUs to CPUs, memory, communications and power systems, driving continued upgrading of Taiwan's supply chain. In particular, demand for advanced packaging continues to expand with GPU and ASIC upgrades, TSMC is actively adding CoWoS capacity, also driving growth opportunities in assembly and test equipment, IC substrates, fab facility engineering, materials and other related industries.
Huang noted that in addition to advanced processes and packaging, optical communications and power systems have become new growth areas. As AI computing cluster scale expands, data transmission speeds are upgrading toward 800G and 1.6T, drawing attention to technologies such as CPO, while rising AI rack power consumption is also pushing power architectures toward high-voltage DC. However, a promising industry outlook does not mean all companies will benefit equally; the key ahead is whether specification upgrades can lift product value, and whether companies have the technological barriers and mass-production capabilities to convert demand into actual profit.
Next Leaders Hard to Predict, Offense-Defense Allocation Recommended
On investment strategy for the next stage of the AI industry, 00400A and Cathay Taiwan High Dividend fund manager Enyi Liang said the long-term AI trend remains unchanged, but the beneficiaries are not static. From chips and servers to advanced packaging, optical communications and power management, industry growth momentum continues to shift. Besides searching for the next industry leader, investors should also consider how to participate in growth while addressing portfolio income needs and risk management. Facing rapid rotation in the AI industry, an offense-defense paired allocation can be adopted.