Taiwan

The U.S. Federal Bureau of Investigation, or FBI, arrested a 34-year-old woman at Los Angeles International Airport before she could board a flight to Shanghai, accusing her of acting as an unregistered agent of the Chinese government and surveilling the son of Taiwan President Lai Ching-te and his family. The suspect, Wanying Zhang, is a resident of Irvine, California, and is accused of photographing the residence and vehicles of the family of President Lai's son in 2025 and sending the information back to handlers in China. Bill Essayli, a U.S. assistant attorney for Los Angeles, said the FBI took Zhang into custody on Sunday local time, and she is scheduled to appear in federal court in Los Angeles on Tuesday for an initial hearing on the charges. Karen Kuo, a spokesperson for Taiwan's Presidential Office, said the case is an example of cross-border repression and condemned actions aimed at pressuring, intimidating or harming those who support freedom and democracy, as well as their families. The arrest came just days after U.S. and Chinese leaders held a summit aimed at stabilizing relations between the two countries, amid Taiwan's concerns over Chinese espionage operations. Between 2025 and early 2026, Taiwan charged 58 individuals in cases suspected of involving espionage for China, and last year four members of the Democratic Progressive Party were sentenced to prison for passing confidential government information to Chinese intelligence, one of whom had served as an aide to Lai when he was vice president.

Rapidus, which aims to mass-produce cutting-edge semiconductors, announced on the 5th that it will launch a "Design Solution Associate" with 17 design-related companies from Japan, the United States, India, Malaysia and elsewhere. The aim is to provide Rapidus customers with each company's design resources and specialized expertise, strengthening the support framework from semiconductor design through manufacturing. Rapidus aims to begin mass production of cutting-edge semiconductors with a circuit line width of 2 nanometers in the second half of next year. In cutting-edge semiconductors, Taiwan Semiconductor Manufacturing, the largest contract chipmaker, is ahead, and the latecomer Rapidus hopes to support customers from the design stage to lead to earlier delivery and create a counterweight. President Atsuyoshi Koike emphasized in an interview with Reuters in August that "speed is everything. Shortening the manufacturing period will be the biggest attraction for customers." Participants include Dai Nippon Printing, Toshiba Information Systems under Toshiba, major US semiconductor design firm Synopsys, and Indian IT services giant Infosys.

Micron Technology reported record quarterly results after the close on Wednesday, but a labor dispute at its Taiwan operations is now threatening production at one of its key manufacturing bases. Fourth-quarter revenue came in at $54.23 billion, ahead of the $50.45 billion consensus and nearly five times the $11.32 billion reported a year earlier, while adjusted earnings of $33.42 a share beat estimates of $31.16. For the full fiscal year, revenue reached $133.19 billion against $37.38 billion the prior year, with operating margin at 76% on a non-GAAP basis, and Micron guided first-quarter revenue to $60 billion to $63 billion, well above the $56.77 billion consensus, with earnings of $37.15 to $39.15 a share. Chairman and CEO Sanjay Mehrotra credited AI demand and the company's Strategic Customer Agreements for the record fiscal 2026 results. According to reports, Micron said its roughly 15,000 Taiwan employees would receive the company's largest-ever compensation package for fiscal 2026, worth the equivalent of 35 to 68 months of base salary for production staff, but the Taoyuan union is pushing for a permanent mechanism allocating 15% of operating profit to employee bonuses rather than another one-off payout. Union chairman Lin Che-jui has said the aim is a long-term, transparent system, negotiations broke down on Sept. 21, and the union has announced plans for a strike vote, while Micron has said it remains willing to continue talks and separate mediation with the Taichung union is scheduled for Oct. 22. Taiwan is one of Micron's most important manufacturing bases for DRAM and the high-bandwidth memory used in AI servers, making any disruption a risk for investors at a time when supply is already tight, and a poll on workplace platform Blind found 75% of respondents support the Micron strikers receiving the additional 15%.

US officials assess that the likelihood of China using military force to invade Taiwan before 2028 has decreased, even though President Xi Jinping has set a goal for the People's Liberation Army, or PLA, to be ready by 2027 to seize Taiwan by force if necessary. Reuters reported this, citing sources familiar with the US government's view, comprising two current US officials, one former US official, and one other person with knowledge of the matter, all of whom provided information on condition of anonymity. A key factor is the delay in improving the readiness of China's military, which has been affected by Xi Jinping's anti-corruption crackdown within the armed forces, as well as the possibility that Beijing may want to wait and see the outcome of Taiwan's presidential election in 2028. US officials also assess that China's military exercises last year were smaller in scale and created less pressure than in several previous years. Meanwhile, investigations and the removal of several senior officials have left the Central Military Commission, which originally had seven members, with only two officials still in active service, including Xi Jinping, who serves as its chairman. The US sources believe that if the Democratic Progressive Party, or DPP, wins the election for a fourth consecutive term, especially if President Lai Ching-te is re-elected, the risk that Beijing will consider using force from 2028 onward could increase. Trump has also not yet approved a new arms package worth about 14 billion dollars, saying the matter is a bargaining chip.

China begins its seven-day National Day holiday, or Golden Week, amid travel expected to hit record highs, while President Xi Jinping has sent an increasingly tough signal on the Taiwan issue. In a speech at the Great Hall of the People in Beijing on September 30, ahead of the 77th anniversary of the founding of the People's Republic of China, he said China will resolutely crack down on separatist forces that support Taiwan independence, oppose interference by external forces, and press ahead with the mission of national reunification. This is a tougher tone than last year, when he only stated firm opposition to Taiwan independence activities. The latest stance comes just days after Xi made an official visit to Washington and called on President Donald Trump to take a clear position against any declaration of Taiwan independence, going further than the long-standing U.S. position. Meanwhile, the Trump administration suspended a 14 billion dollar arms sale package to Taiwan in May and has shown less support for Taiwan over the past year. China's Ministry of Transport expects about 2.13 billion trips during the holiday period, or nearly 300 million trips per day on average. Cross-border travel is expected to average about 2.16 million trips per day. Bookings for domestic flights of more than 2,000 kilometers rose about 14 percent, while international flight ticket bookings rose 22.5 percent from the same period last year.

GMI Cloud has raised $668 million in new financing, comprising $223 million in equity for its Series B round and a $445 million credit facility led by CTBC. The Series B was led by ARCHIV, a San Francisco investment firm specializing in AI and robotics, with participation from NVIDIA and Asia-Pacific investors including DSC Investment, Trend Micro, KB Investment, Kyobo Life and KT Corporation. The growth capital will fund capacity expansion in the United States, Taiwan and the rest of APAC, building on the company's Taiwan AI Factory and its Japan sovereign AI initiative, and will also support its inference services and strategic hiring. GMI Cloud said its contracted ARR has reached more than 9x its year-end 2025 level, while live ARR in production has grown more than 4.5x over the same period, and its inference platform now processes approximately 4 trillion tokens per week. Customers include Fireworks, Higgsfield, Nous Research, OpenRouter, Reflection, Cartesia, Trend Micro and Utopai Studios.

Deutsche Bank initiated coverage of FormFactor with a Buy rating and a $200.00 price target, sending the semiconductor testing company's shares up 7.8% in the morning session. Analyst George Brown said FormFactor has secured a position as a second source of probe cards for Nvidia GPUs at TSMC, with initial sales from that supplier role projected to begin in the second half of 2026. Brown projects FormFactor is targeting approximately 20% market share in this GPU probe card business, a share that could generate over $0.2 billion in sales by 2028. FormFactor is up 149% since the beginning of the year and, at $147.67 per share, is trading close to its 52-week high of $159.93 from June 2026.

ASML and Taiwan Semiconductor Manufacturing Co. are heading into earnings with investors focused less on recent results and more on how the market may respond. Both chipmakers have posted strong quarters yet saw their shares weaken afterward, and Awad expects the upcoming results to show whether semiconductor earnings can become catalysts again as expectations reset. ASML supplies lithography equipment while TSM operates as a major semiconductor foundry, giving the two a broader view of industry conditions because their businesses sit further up the chip supply chain. Investors may also scrutinize spending plans from large cloud companies for 2027 and whether AI costs are declining, with Awad pointing to lower pricing for some AI models and discounts from major providers as factors that could influence infrastructure spending. ASML is scheduled to report third-quarter results on Oct. 14, followed by TSM on Oct. 15, and Awad said the reactions could offer clues about how markets are assessing AI-related demand heading into 2027.

The United States is pouring billions into domestic semiconductor manufacturing to reduce its reliance on Taiwan for advanced AI chips, with Taiwan Semiconductor Manufacturing Co.'s U.S. investment commitment reaching $265 billion. The planned expansion includes six logic fabs, two advanced packaging facilities and a research and development center in Arizona, and TSMC has indicated that roughly 30% of its 2-nanometer and more advanced manufacturing capacity could eventually be located in the state. Shay Boloor, chief market strategist at Futurum Equities, cautioned that expanding domestic production does not mean the U.S. can fully replace Taiwan, saying he views the U.S. buildout as a strategic hedge rather than a true replacement, and noting that even chips manufactured in Arizona could continue depending on Asian facilities for parts of the final packaging process. Boloor said Washington is prioritizing capabilities where disruptions could have the greatest consequences, including advanced logic, packaging and domestic capacity to support critical AI infrastructure, while Taiwan is expected to remain central to leading-edge research and manufacturing. In February 2026, Taiwan rejected a U.S. proposal to shift 40% of its semiconductor supply chain to America, with Taipei's top tariff negotiator calling the plan impossible.

Electronics sector stocks rose sharply across the board on September 29, moving against the decline in the Thai stock index. KCE Electronics Public Company Limited, or KCE, climbed 11.07%, or 7.50 baht, to close at 75.25 baht. Next came Cal-Comp Electronics (Thailand) Public Company Limited, or CCET, up 4.42%, or 0.40 baht, to close at 9.45 baht, and Hana Microelectronics Public Company Limited, or HANA, up 2.44%, or 1.25 baht, to close at 52.50 baht. Naphan Jaisaen, deputy manager of the research department and a fundamental investment analyst covering capital markets at Bualuang Securities Public Company Limited, said KCE received positive news flow from negotiations to develop printed circuit boards, or PCBs, jointly with Tesla for use in humanoid robot projects, artificial intelligence technology, and communication systems. He assessed that a price of 60 to 65 baht reflects value from the existing business and product price increases, while 70 to 75 baht reflects orders tied to Tesla, and 80 to 85 baht reflects the chance of winning orders related to AI technology. He recommended waiting to accumulate shares in the 60 to 65 baht range. As for HANA, he said it has already traded on the AI story ahead of actual earnings figures, giving a price range of 50 to 55 baht and recommending waiting for a pullback before buying. Meanwhile, an analysis by Kiatnakin Phatra Securities Public Company Limited recommended buying KCE with a target price of 104 baht and raised its target price for HANA to 61 baht from 42 baht, while lifting its profit forecasts for 2026 and 2027 by 8% and 31% respectively.

Taiwan's defense minister has revealed that Taiwan is continuing discussions with the United States on arms purchases and has received assurances from Washington that its policy toward Taiwan remains unchanged, following last week's meeting between President Donald Trump and Chinese President Xi Jinping in Washington. Wellington Koo, Taiwan's defense minister, told reporters today that since the summit, the Taiwanese government has received repeated clarifications from the US side that Washington's policy toward Taiwan remains the same, and that for arms procurement programs currently underway, each project requires concrete cooperation, with no notification of any changes so far. One of the delayed programs is an order for 66 F-16V fighter jets from Lockheed Martin, placed in 2019, equipped with modern electronics, weapons, and radar to enhance the ability to counter the Chinese air force, including the J-20 stealth fighter. Taiwanese media reported that the first two F-16V jets are in Hawaii awaiting delivery to Taiwan. Koo did not disclose a delivery schedule, saying only that production has reached a stage where delivery is possible, and noted that due to the delays, related compensation measures are in place. China has consistently urged the United States to stop selling arms to Taiwan. In May, after visiting Beijing, Trump said the United States had paused consideration of a new arms package worth about 14 billion dollars, but after meeting Xi in Washington last week, Trump said only that Xi understood his position on Taiwan.

President Lai Ching-te, Taiwan's leader, said Taiwan needs to tighten cooperation with democratic countries in developing drone technology, which is crucial to waging modern warfare, amid rising military pressure from China. Speaking today at the groundbreaking ceremony for a new drone development center in Chiayi in southern Taiwan, he said that from the battlefields of Ukraine to security in the Indo-Pacific region, drones have become a key fighting force in modern national defense. He called on Taiwan to work with democratic countries to develop a secure and resilient drone supply chain in order to support peace and stability in the Indo-Pacific. His remarks came as the Taiwanese government pushes ahead with military upgrades and higher defense budgets as one of its main policies, after China stepped up military pressure on Taiwan earlier this month. Taiwan's Cabinet proposed adding 145.7 billion Taiwan dollars, about 4.59 billion US dollars, to this year's defense budget. The budget covers the procurement of drones and missile interception systems, including more than 600 surveillance and coastal patrol drones, more than 40,000 coastal attack drones, and more than 100 explosive-laden unmanned boats. Lai said Taiwan has strengths in semiconductors, information and communications technology, and high-precision manufacturing bases that can be leveraged to develop a drone industry.

US Ambassador to China David Perdue said the United States' position on Taiwan remains unchanged after President Xi Jinping's state visit to the US last week. Speaking on a Fox News program on the 27th, Perdue said, "We do not support independence, and we do not support coercion." During his visit, Xi pressed US President Donald Trump to curb support for Taiwan, which China regards as its own territory, and demanded a clear "opposition" to Taiwan independence. It was the first time Xi has publicly called for a change in the United States' decades-old position on Taiwan. According to Perdue, the Trump administration has already approved the sale of 11 billion dollars' worth of US-made weapons to Taiwan, and talks on additional sales are continuing.