AI Data Centers Lift Optical Communications Demand, Driving Taiwan Stocks Higher

Cloud giants including Google and Microsoft are aggressively expanding their AI data centers, putting the optical transceivers that connect computing infrastructure in the technology spotlight. To overcome bottlenecks in transmission power consumption and heat dissipation, the industry is accelerating adoption of low-power linear pluggable optics and silicon photonics. The shift is creating a major growth opportunity for Taiwan's semiconductor supply chain, which has strengths in wafer fabrication and advanced packaging.

According to the latest report from research firm TrendForce, the global market for AI-dedicated optical transceivers is surging. Its value is projected to climb rapidly from $16.5 billion in 2025 to $26 billion in 2026, representing annual growth of more than 57%. Major manufacturers are accelerating deployments of high-end 800G-and-above modules to meet demand, while Taiwanese suppliers are also moving aggressively to secure positions in the critical supply chain.

As AI models grow in scale, data-center bottlenecks are spreading beyond GPUs to high-speed transmission, heat-resistant materials and cooling capacity, making optical fiber, polymers, adhesives and liquid-cooling technology critical. Meta Platforms signed a multiyear supply agreement worth up to $6 billion with Corning on January 27, 2026, underscoring how AI infrastructure spending is spilling over into the materials supply chain.

On February 25, 2026, Corning and AXT gained 5.83% and 16.79%, respectively, in a single session, while Shin-Etsu Chemical was up more than 22% year to date. As of March 13, LSEG data citing Johnson Matthey prices put ruthenium at $1,750 an ounce, more than three times its lows of $500–$600 a year earlier. Metals Focus estimated a supply deficit of 203,000 ounces in 2026.