ASIC Boom: Taiwan Chip Designers Ride AI Surge as Global Market Poised to Reach $1.1 Trillion

Key facts

• Global ASIC market size was $45.1 billion in 2024, projected to reach $1.1 trillion by 2028, CAGR over 122%.
• Taiwanese ASIC designers Alchip, Global Unichip, and MediaTek are winning orders from AWS, Google, and Meta.
• MediaTek CEO Rick Tsai said its first AI accelerator ASIC for a US hyperscaler will generate $20 billion in revenue by Q4 2026, double earlier estimates.
• Global Unichip posted record quarterly profit of NT$12.28 per share in Q1 2026, its first time earning over one full share of profit in three years.
• Alchip expects revenue and profit to return to steady growth in 2026, with analysts forecasting record annual revenue.
• Google and AWS are the most active CSPs in initiating chip designs and placing orders, while Microsoft's ASIC business faces cost efficiency challenges.
• Broadcom and MediaTek are competing for Meta's next-gen AI chip order, while Marvell and Alchip vie for AWS contracts.
• PCB maker Compeq is entering the AI ASIC supply chain, with analysts projecting EPS of NT$7 in 2027.

Taiwanese ASIC Designers Surge on AI Demand

Taiwanese application-specific integrated circuit (ASIC) designers are experiencing a golden moment as the global AI boom drives unprecedented demand for custom chips. Alchip Technologies, Global Unicorp (also known as Global Unichip), and MediaTek have all secured major orders from cloud service providers (CSPs) such as AWS, Google, and Meta, positioning them for record-breaking years. On August 12, the ASIC sector on the Taiwan stock market surged over 12% in just 20 trading days, with memory chips jumping 8.89% and SoC and lithography stocks rising over 5%. The rally was fueled by three positive catalysts: Huawei's release of its UCM (Unified Computing Memory) technology, which reduces reliance on foreign HBM chips; the anticipated launch of DeepSeek-R2 between August 15-30, 2025, which could drive ASIC demand for inference; and Cambricon's strong Q1 results, which saw revenue surge 4,230% to 11.11 billion yuan and net profit turn positive at 3.55 billion yuan, sending its stock up 20% in a single day.

Major Orders from Hyperscalers Drive Revenue Growth

Alchip has secured next-generation chip orders from AWS, with production of 3nm AI chips for a North American CSP expected to ramp up in the middle of the current quarter. The company expressed confidence in returning to steady revenue and profit growth in 2026, with analysts projecting record annual revenue. Global Unichip, which reported record quarterly profit of NT$12.28 per share in Q1 2026, is benefiting from two major US CSP customers' CPU and AI inference chip orders. The company has also secured next-generation CPU projects, ensuring sustained revenue momentum. Analysts expect its revenue and profit to grow over 30% this year. MediaTek, a latecomer to the ASIC space, is seeing explosive growth. CEO Rick Tsai announced that the first AI accelerator ASIC for a US hyperscaler is on track for mass production, with revenue expected to reach $20 billion by Q4 2026—double the previous estimate of $10 billion. MediaTek has raised its total addressable market forecast for data center ASICs to $70-80 billion by 2027, targeting a 10-15% market share.

Intense Competition Reshapes ASIC Landscape

The ASIC market is witnessing fierce competition among global players. Broadcom currently holds the leading position, often the initial frontrunner for large deals due to its strengths in design, manufacturing, and market access. However, rivals are closing the gap. Marvell has announced plans to increase its focus on ASICs through internal restructuring and cost control. MediaTek's rapid ascent has surprised the industry, with its competitiveness now on par with major US suppliers. The battle for Meta's next-generation AI chip order is particularly intense, with Broadcom and MediaTek both vying for the contract, while Marvell and Alchip continue to compete for AWS business. Google and AWS are the most aggressive in initiating chip designs and placing orders, while Meta remains active but faces near-term uncertainty due to internal AI strategy adjustments. Microsoft's ASIC business is struggling with cost efficiency issues, potentially requiring more projects to stay viable, which could strain its chipmaking partners.

Global Market Poised for Explosive Growth

The global ASIC market is projected to grow from $45.1 billion in 2024 to $1.1 trillion by 2028, a compound annual growth rate of over 122%. This growth is driven by demand from AI, high-performance computing, networking upgrades, and automotive intelligence. AI server demand from CSPs remains strong, with total AI server shipments expected to grow 28% year-over-year in 2025. ASIC-based AI servers are forecast to outpace GPU-based servers from Nvidia, with ASIC machines accounting for about 27% of total AI server shipments. Nvidia's GPU architecture remains the leader, but ASICs are gaining share. Capital expenditure by major CSPs underscores the trend: Google, Meta, and Amazon have raised their 2025 capex to as high as $85 billion, $72 billion, and $120 billion, respectively. TSMC predicts the global semiconductor market will reach $1 trillion by 2030, with AI as the core engine and HPC/AI chips capturing 45% of that market.

PCB Maker Compeq Enters AI ASIC Supply Chain

Taiwan's Compeq Manufacturing, a printed circuit board (PCB) maker, is capitalizing on the AI ASIC boom. The company has entered the supply chain of CSPs for AI ASIC projects, initially providing CPU motherboards and non-GPU, non-AI chip PCBs. However, industry sources indicate Compeq could supply AI chip motherboards for second-tier CSPs by 2027, boosting its server business from 3-4% to 6% of revenue. Compeq's low-earth orbit (LEO) satellite board business is also thriving, with high-margin LEO board revenue expected to reach NT$16 billion in 2025, up 23% from 2024 and accounting for over 20% of total revenue. The company's first-half 2025 revenue was NT$34.93 billion, with net profit of NT$2.145 billion and EPS of NT$1.8, the second highest for the period in 20 years. July 2025 revenue hit NT$5.995 billion, up 4.88% month-on-month, and cumulative January-July revenue of NT$40.926 billion set a record for the period. Analysts project Compeq's 2025 EPS will exceed NT$5, and with AI ASIC supply chain contributions, 2026 EPS could reach NT$7. Foreign investors added 5,886 lots of Compeq shares last week, and the stock rose 6.81% to NT$81.5 on heavy volume.

Outlook: ASIC Sector Poised for 'Davis Double Play'

The ASIC sector is experiencing what analysts call a 'Davis Double Play'—simultaneous growth in earnings and valuation multiples. With multiple positive catalysts, including Huawei's UCM technology, DeepSeek-R2's upcoming launch, and strong earnings from chip designers, the sector is attracting investor attention. However, questions remain about the sustainability of the rally and whether it can generate new industrial chain opportunities. The intense competition among ASIC designers, particularly between Broadcom, Marvell, MediaTek, and Taiwanese firms, will shape market dynamics. The ability of companies like MediaTek to execute on large orders and maintain margins will be crucial. As AI continues to drive demand for custom chips, the ASIC market is set for explosive growth. The winners will be those that can secure long-term partnerships with hyperscalers, deliver cutting-edge designs, and scale production efficiently. For now, Taiwanese ASIC designers are well-positioned to ride the wave.

The bottom line

• The global ASIC market is forecast to grow from $45.1 billion in 2024 to $1.1 trillion by 2028, driven by AI and cloud computing.
• Taiwanese ASIC designers Alchip, Global Unichip, and MediaTek are winning major orders from AWS, Google, and Meta, with MediaTek alone expecting $20 billion in AI ASIC revenue by Q4 2026.
• Competition is intensifying: Broadcom and MediaTek are battling for Meta's next-gen AI chip, while Marvell and Alchip compete for AWS contracts.
• Google and AWS are the most active CSPs in custom chip development, while Microsoft's ASIC efforts face cost hurdles.
• PCB maker Compeq is entering the AI ASIC supply chain, with analysts projecting EPS of NT$7 in 2027.
• The ASIC sector may experience a 'Davis Double Play' as earnings and valuations rise, but sustainability depends on execution and demand continuity.