TAIEX Plunges Below 44,000 in Midday Trading
Sell-off pressure continued to emerge in Taiwan stocks today on the 3rd, with the Weighted Index opening lower and moving lower, and declines expanding in intraday trading. As of 12:55 noon, the Weighted Index fell 1547.49 points, down 3.44%, to 43372.65 points, falling below the 44000 integer level. Observing intraday movement, the index weakened all the way after a brief early rebound, with no clear sign of stabilizing by midday, as market selling pressure remained heavy. Whether the 43000 level can be held will be the key focus going forward.
AI Infrastructure Spreads to Diverse Hardware Segments
Cathay Securities Futures consultants point out that AI applications continue to deepen, global data center buildout is accelerating, and semiconductor and networking infrastructure upgrades are underway, with industry growth momentum gradually spreading from core AI computing to high-speed transmission, optical communications, advanced processes, enterprise-grade storage, and power equipment. As Agentic AI drives inference demand, AI server architectures become increasingly complex, and enterprise AI adoption moves from pilot to large-scale deployment, related hardware specification upgrades and supply-chain investment will continue to drive long-term growth opportunities. Overall, AI infrastructure remains a key medium- to long-term market growth engine, but valuations and growth expectations have already reflected progress to varying degrees across stocks, and fundamentals, order visibility, and valuation levels should be carefully evaluated going forward.
Fortune ElectricQuanta ComputerTaiwan Specialty Chemicals Maintain Buy Ratings
Realtek2379 benefits from networking infrastructure upgrades and high-bandwidth demand, with 2026 revenue estimated to grow 21.8% year-on-year, and 2027 revenue estimated to grow 9.7% year-on-year driven by 2.5G, 5G, Wi-Fi 8 and high-speed Ethernet specification upgrades. 2026 and 2027 EPS are estimated at 31.91 and 38.15, but the share price has already reflected most growth expectations, leaving limited upside, maintaining a Neutral rating. Taiwan Specialty Chemicals4772 posted Q3 2026 EPS of 1.65, in line with expectations, with silane annual capacity raised to 30 tons and year-end utilization estimated at 70% to 80%. Benefiting from becoming a major supplier for the N2 process and advanced-process expansion, capacity expansion by Hongjie Technology also helps capture advanced-packaging demand, with further expansion possible in 2027, maintaining a Buy rating. Fortune Electric1519 plans to invest 3.5 billion in a smart factory at Taichung Port, benefiting from North American AI data centers, grid upgrades and Taipower resilient-grid demand, with order visibility extending to 2029 and beginning to take 2030 orders. AIDC cumulative orders exceed 20 billion, Q4 2026 gross margin is expected to challenge 44%, and 2027 EPS is estimated at 29.4, maintaining a Buy rating. Quanta Computer2382 benefits from Agentic AI driving inference demand, with general-server revenue expected to maintain high double-digit growth, AI business accounting for about 80% of server revenue, and the Vera Rubin platform expected to ramp up in Q1 2027. Q3 2026 revenue was 1.12 trillion, up 125% year-on-year, and looking to 2027, profit is estimated to grow 35% to 40% with overseas capacity expansion and order continuity, maintaining a Buy rating.
Optical Communications, Storage and US Stock Supply-Chain Developments
For LandMark Optoelectronics3081, Marvell announced the acquisition of Lumentum, strengthening its optical transceiver module, OCS and InP technology portfolio, reflecting continued expansion of AI data-center optical interconnect demand. The research department believes the direct impact on Taiwan optical-communication chip suppliers is limited, and remains optimistic on InP substrate demand and AI data-center expansion opportunities, maintaining a Buy rating. For Phison Electronics8299, Kioxia's guidance below expectations mainly reflected early order shipments and exchange-rate effects, not weakening end demand. 2027 capacity is nearly sold out, more than half of 2028 shipments are secured by long-term contracts, new capacity will come online as early as 2029, NAND supply-demand tightness is expected to continue, and Phison Electronics benefits from enterprise SSD, AI storage and system-solution growth, maintaining a Buy rating. Apple Q4 FY2026 revenue grew 11.7% year-on-year, benefiting from strong iPhone 18 Pro and Mac demand, with Taiwan supply-chain beneficiaries including Unimicron, Compeq, Zhen Ding Tech, Largan Precision, WIN Semiconductors and Hon Hai, while MacBook and OLED upgrades also benefit vendors such as Quanta Computer. Palantir Q3 FY2026 revenue was 2.31 billion US dollars, up 96% year-on-year, a new post-listing high, with US commercial business becoming the main growth engine and full-year guidance revised upward, which is positive for TSMC and other AI hardware supply chains over the long term. For the IC design industry, increasingly complex AI server nodes and rack architectures are driving demand for BMC, RoT and management-network chips, with the global BMC market estimated to grow at an 18% CAGR from 2026 to 2030. Aspeed Technology benefits from AST2700 lifting ASP, Nuvoton Technology is building BMC growth business, and Airoha Technology is entering AI data-center OOB networks through PON, with positive long-term growth momentum.