The impact of the slowdown in U.S. data center construction on Taiwan’s AI supply chain. (Photo provided by Eastspring Investment Bank)
[Reporter Wu Xintian/Reported from Taipei] Concerns about the construction of data centers in the United States have increased, and the market is worried that the momentum of AI investment has cooled down, which has affected investment confidence in Taiwan's AI supply chain. Taiwan stocks fell nearly 3,800 points at the opening of the 6th. Eastspring Investment Trust pointed out that the slowdown in data center construction may indeed affect Taiwan's AI supply chain, but the current observation is mainly that demand is deferred rather than canceled, but the degree of impact on different supply chains will be significantly different.
Eastspring Investment Trust pointed out that the current main bottleneck in the construction of U.S. data centers comes from power supply and related permits, which has delayed some projects. After the U.S. midterm elections, the market's doubts about the construction process of data centers have been further amplified.
Eastspring Investment Trust said that most of the new capacity in 2027 has entered the construction or completed financing stage, and the risks that really need to be paid attention to are mainly concentrated in projects after 2028 that have not yet obtained power and permits. At present, the actual cancellation rate of locked orders is still estimated to be only a single-digit percentage, and most of them are processed through postponement or renegotiation. Therefore, at this stage, there is no signal that the demand for AI will disappear significantly.
From the perspective of Taiwan's supply chain, the degree of impact has also varied. Server ODM, cooling, power supply and PCB are highly linked to the actual construction schedule of the data center, and are more susceptible to order delays in the short term; in comparison, wafer foundry and advanced packaging benefit from higher prepayments and long-term commitments, and demand visibility is relatively good. CoWoS supply will still be tight until the end of 2027.
Although short-term market sentiment is weak, Eastspring Investment Trust pointed out that the recent correction of Taiwan stocks has gradually reflected the market’s uncertainty about the profitability of the AI supply chain from 2027 to 2028. At present, the market has not significantly lowered its corporate profit forecast for 2027. The forward price-to-earnings ratio for 2027 has dropped to about 13 times, which is close to the lower edge of the price-to-earnings ratio range in the past five years. If concerns about subsequent data center construction and AI capital expenditures are alleviated, we can pay attention to market rebound opportunities.
In terms of industrial layout, Eastspring Investment Trust still focuses on the AI supply chain and continues to be optimistic about wafer foundry, ASIC, power supply, heat dissipation and PCB. In the future, we should closely observe the 2027 capital expenditure guidance of each CSP, the Texas data center connection restrictions, whether the new Congress proposes data center or power-related bills, and the changes in monthly revenue, inventory and advance receipts of Taiwanese factories, as important indicators for subsequent judgments of AI demand and supply chain profitability.
