Morgan Stanley: Supply constraints to drive next phase of the AI boom

Morgan Stanley’s decision to host its Asia AI Summit in Taipei signals a strategic acknowledgment that the epicenter of AI infrastructure is shifting. Technologically, this accelerates co-optimization across advanced packaging, HBM memory, and CoWoS capacity, compelling EDA, photoresist, and test equipment suppliers to localize support. On compliance, tightening U.S.-EU export controls on AI chips expose Taiwan, China-based firms to supply chain fragility and surging regulatory overhead if overly reliant on single-source tech. Competitively, Samsung and SK Hynix will hasten HBM4 ramp-up, while mainland China doubles down on domestic Chiplet standards to bypass advanced-node restrictions. Over the next 12–24 months, the ‘long tail’ will manifest as polarized manufacturing clusters: Taiwan, China retains leadership in high-end fabrication, but geopolitical risk premiums may inflate capex and insurance costs, eroding ROI sustainability.