The Force Driving AI Servers: Taiwan’s Complete Supply Chain Cluster

Wise Research, part of Wise Consulting Group, a Taiwan-based consulting firm serving Japanese companies in Taiwan and headquartered in Taipei, Taiwan, began publishing its Taiwan Industry Strategy feature on May 15, 2026. The feature focuses on “The Force Driving AI Servers: Taiwan’s Complete Supply Chain Cluster.” The full picture of a complete supply chain contained within Taiwan Since 2024, Wise Research has been providing information on the strengths of Taiwan’s AI server industry through its Wise Machinery Industry Journal. Taiwan’s greatest advantage is that the world’s top players in nearly every key component related to server manufacturing are concentrated within Taiwan’s extremely compact geographic area. This high-density industrial cluster is mainly composed of the following sectors. 1. Semiconductor manufacturing In the manufacturing of cutting-edge logic semiconductors, the brains of AI servers, TSMC holds an overwhelmingly dominant position. In the OSAT field, which handles back-end packaging and testing, Taiwanese companies such as ASE Technology Holding are also global leaders. 2. Substrates and PCBs In high-layer-count, high-density, and high-reliability printed circuit boards (PCBs) and IC substrates, which serve as the lifelines of servers, Gold Circuit Electronics (GCE) and Unimicron are shaping industry standards with exceptionally strong technical capabilities. 3. Power supply units For AI servers that consume massive amounts of power, Delta Electronics and Lite-On Technology hold world-class market shares in technologies that deliver power efficiently and stably. In particular, unit prices for AI server power supplies are expected to rise at an annual pace of 40%, reflecting a clear shift toward higher value-added products. 4. Cooling systems In thermal management, the biggest physical challenge for AI servers, Taiwanese manufacturers supply 70% of the global market for cooling products. Asia Vital Components (AVC) and Auras Technology have strong market competitiveness. 5. Final assembly and vertical integration The integration of these components into finished servers, followed by rapid assembly and shipment, is handled by major ODM/OEM companies such as Quanta Computer, Hon Hai Precision Industry, Wistron, and Wiwynn. The fact that everything from upstream processes to downstream final assembly can be completed seamlessly within Taiwan is the foundation of the world’s fastest supply system. The shift to AI servers and the wave of higher profitability The biggest trend sweeping the server industry is the rapid shift from conventional general-purpose servers to AI servers. Because AI servers require advanced computing capabilities and highly complex components, their unit prices are extremely high. This shift is dramatically improving profit margins across Taiwan’s entire supply chain and driving the industry toward higher profitability. This historic transformation in business structure is clearly reflected in company results. At Quanta, for example, servers are expected to account for more than 50% of 2024 revenue for the first time, surpassing its core notebook PC business. At Hon Hai, the largest EMS provider, cloud networking products such as servers and data centers reached 42% of revenue in the third quarter of 2025. This marked the first time they surpassed consumer smart products such as smartphones, previously the company’s largest revenue source, at 37%. Orders for servers equipped with NVIDIA’s GB200 and GB300 are strongly driving this shift.