AI boom drives Foxconn past 40% of Taiwan-listed firms' China returns, with FII leading the way

The AI boom is reshaping the global semiconductor supply chain, with Foxconn's 117.6 billion NT dollar return on investments in China highlighting its dominance in HPC and AI chip manufacturing. This trend is driving upstream material and equipment demand, as well as midstream foundry services, particularly in EUV lithography and advanced packaging. However, geopolitical tensions are escalating, increasing compliance costs and supply chain risks for firms operating in a fragmented regulatory environment. Competitors like TSMC and UMC are accelerating investments in mainland China to capture AI market share. Over the next 12 to 24 months, Taiwanese firms will deepen integration into China’s AI ecosystem, but policy volatility will remain a key constraint on long-term capital returns.