MediaTek Hits Limit-Up on AI ASIC Buzz, Lifting Taiwan Stocks to Record High

MediaTek is broadening its business beyond smartphone chips as cloud and edge artificial intelligence create new demand for application-specific integrated circuits. The expansion matters because successful AI ASIC programs could diversify revenue and strengthen the Taiwanese chip designer’s position across computing, connectivity and power-efficient silicon, supporting its evolution into a more comprehensive AI platform supplier.

MediaTek’s second-quarter results beat market expectations, helped by robust demand for cloud and edge AI ASIC products. Its first AI ASIC remains scheduled to enter mass production in the fourth quarter of 2026. Citi reiterated its Buy rating, saying the company is becoming a full-spectrum AI silicon platform provider, and sharply raised its price target to NT$6,800.

The AI data-center construction boom continues to lift demand for high-performance chips, server power supplies and advanced manufacturing processes, making Taiwan's supply chain a magnet for investment because it spans chip design, foundry services and power management. MediaTek is moving into chip design for Google's TPUs, Delta Electronics has built a strong position in AI server power supplies, and TSMC is benefiting as major AI customers increase orders.

Taiwan shares jumped more than 1,200 points at one stage in early trading on July 20, reaching a record 44,750. MediaTek and Delta Electronics both hit their daily limit-up levels, while TSMC rose NT$55 intraday. Broad gains among AI chip and server supply-chain companies were the main force driving the benchmark index above its previous high.

MediaTek has long focused on smartphone chips but has moved aggressively into custom AI accelerator ASICs developed by cloud providers. The market expects the company to secure a major Google order, with its first project already in mass production and forecast to generate $2 billion in revenue in 2026, providing an important growth engine beyond its handset business.

Optimism over AI ASICs drove MediaTek shares higher for several consecutive sessions, with the stock at one point opening limit-up at NT$2,870 per share, a record high. The company also forecast that the related market could reach $80 billion in 2027. The Taiwan Stock Exchange subsequently placed the shares under trading restrictions after their rapid gains, and the stock fell nearly 4% at one point after the open.