Asia's AI rally is minting new winners deep in the chip supply chain

The wave of AI investment that has swept Asia over the past two years is no longer a story about a handful of big names. It is now reaching less visible but critical links in the semiconductor supply chain, and it is creating new winners in places that were losing money just a year ago.

The first tier is already taken

In the first phase of the AI boom, investors focused on the obvious beneficiaries. TSMC, the world's only contract manufacturer of leading-edge chips, posted record revenue and a jump in market value that would have seemed fantastical not long ago. SK Hynix and Samsung, which control the market for HBM memory used in AI accelerators, multiplied their profits several times over. These stocks became the symbols of the AI investment theme for institutional funds.

But by 2025–2026, large institutional investors had already built positions in the first tier, and valuations had climbed to levels that would have looked inflated a year earlier. The upside shrank noticeably, so analysts started looking further down the chain, at places mainstream investors had not yet reached.

Who rises next

Orders are now growing at companies that rarely make headlines but without which AI chips simply cannot be built. They include Taiwanese and Japanese makers of substrates for CoWoS advanced packaging. This component is the bottleneck of the entire production chain, and lead times for it have stretched to 12 months. Suppliers of specialized equipment, chemicals, and consumables for HBM memory production are also gaining momentum.

The new winners of the AI rally:

• Makers of CoWoS packaging substrates, a critical bottleneck for accelerators from leading chipmakers
• Taiwanese and Japanese companies producing high-frequency PCBs for server boards
• Suppliers of liquid cooling systems for AI clusters that draw tens of megawatts
• Makers of high-efficiency power supplies for new generations of data centers
• Companies supplying specialty chemicals and materials for HBM production

Just 12–18 months ago, shares in many of these companies sat at historic lows: the consumer electronics market collapsed after COVID, orders fell, and forecasts were revised downward. Since the start of 2025, their stocks have gained between 40 and 120%.

Hyperscalers set the pace

The rally's staying power comes down to the scale of Big Tech's capital spending. Microsoft, Google, Amazon, and Meta have collectively committed hundreds of billions of dollars to AI infrastructure in 2026 alone. Bloomberg Intelligence estimates the four companies' combined investment will exceed $300 billion.

That money flows steadily down the production pyramid: from chipmakers to makers of substrates, components, cooling systems, and specialty chemicals. Each level of the pyramid gets its share of the investment flow, and the chain now works as a single multiplier.

"Our customers used to plan one quarter ahead.

Now we get visibility of a year and a half to two years," executives at several Taiwanese second-tier suppliers told Bloomberg.

Long-term contracts are fundamentally changing these companies' business profiles. The semiconductor industry's historic cyclicality, with sharp booms followed by equally sharp busts, is losing its former force. Predictable capacity utilization lowers risk and draws in new investors.

What it means

The AI rally is turning into a structural upswing for a broad range of Asian high-tech companies: not just top-tier chipmakers, but the entire supplier pyramid. Markets have already noticed. Indexes of second-tier tech companies in Taiwan and South Korea are hitting multiyear highs.

For investors who missed the first wave of gains at TSMC and SK Hynix, a second tier is opening up: lesser-known but critically important companies without which no AI accelerator will ever make it to a data center.

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