KGI Securities Favors AI Supply Chain After Valuation Reset

Artificial intelligence and semiconductor supply chains have become central to global technology development, helping Taiwan stocks reach repeated record highs in recent years and making leading companies’ earnings a key valuation benchmark. AllianceBernstein Investments Taiwan said continued capital-expenditure expansion by global technology giants underpins the semiconductor and AI supply chains’ long-term fundamentals. As Taiwan’s market turns volatile, the earnings and long-term allocation value of these key companies are important indicators of its momentum.

AllianceBernstein Investments Taiwan said on July 13, 2026, that profit-taking had pushed Taiwan stocks into volatile trading near record highs, with the weighted index falling 3.05% in one week. With second-quarter earnings reports due in July, investors are refocusing on corporate earnings and fundamentals. Assets in its actively managed ETF, 00404A, had reached about NT$3.340 billion by mid-July. Deputy General Manager Lin Bing-kui said the pullback reflected a valuation adjustment, while the long-term fundamentals of the semiconductor and AI supply chains remained solid.

Escalating conflict in the Middle East and the closure of the Strait of Hormuz, a route for about 20% of global oil shipments, have fueled concerns about a renewed rise in oil prices and inflation. KGI Securities Investment Trust said Taiwan remains central to AI chip manufacturing and server supply chains, with neither demand nor its technological edge altered by the conflict. Taiwan stocks have generally delivered positive returns over periods of 30 days or more following major geopolitical events in the past 10 years.

Taiwan’s stock market opened down more than 1,000 points on March 4, 2026, falling below 34,000 as investors shifted into cash and safe-haven assets in response to Middle East risks. KGI recommended buying in stages on market weakness and holding for the long term. Cathay United Bank said the same day that inflationary pressure would increase if oil remained at $75–$80 a barrel, while the United States was seeking to prevent prices from breaking above $100.