The recent US-Taiwan tariff agreement has minimal effect on servers’ original design manufacturers (ODMs), as server products were excluded from both previous reciprocal tariffs and the semiconductor-related Section 232 tariffs. Industry insiders say that rather than tariffs, customer preferences drive production decisions, with most companies now manufacturing in the US primarily to meet customer requirements.

With shipments of application-specific integrated circuits (ASICs) and XPUs expected to rise sharply in 2026, AI accelerators are set to continue relying on fifth-generation high-bandwidth memory, or HBM3E. Micron said at a recent earnings call that while demand for sixth-generation HBM4 is strong, it is also responding to additional growth in HBM3E demand.

After months of negotiation, the United States and Taiwan have reached a provisional breakthrough in their tariff talks, signing a memorandum of understanding on investment cooperation. Li-chun Cheng, Taiwan’s vice premier, said the agreement makes Taiwan the first economy worldwide to secure a relatively comprehensive and most-favored set of terms in anticipation of potential future tariffs imposed by the United States under Section 232 of the Trade Expansion Act.

Taiwan Surface Mounting Technology Corp. said revenue returned to growth in 2025 after two consecutive years of decline, though rising prices and tight supply of key components are expected to weigh on overall end-market demand. The surface-mount technology provider said it remains cautious on consumer electronics while seeing clearer growth momentum in DRAM modules and automotive applications in 2026.