Taiwan's semiconductor supply chain accelerated in April, with the Taiwanese tech composite up 9% for the month. The index has now exceeded Wall Street consensus estimates by 5% overall, continuing a pattern established two years ago when Wedbush first built this tracker.
The breadth of strength is notable. Sixteen of eighteen categories in the composite outperformed expectations on an absolute basis. One was flat. Only ASICs underperformed. The gains were driven by memory, which surged 35% ahead of typical linearity, and PC OEMs, which ran 16% above expectations.
Memory remains the standout. Transcend's April sales were nearly 100% ahead of typical linearity for the month. Apacer and Phison also significantly exceeded guidance. The strength reflects what Wedbush describes as robust memory average selling price gains driven by persistent demand from cloud service providers. Pricing has risen considerably over recent months and is expected to accelerate further this quarter.
The data centre GPU server buildout is the underlying driver. Memory chips remain supply-constrained, with the analysts projecting equilibrium unlikely before 2027. Third-quarter pricing may see double-digit gains, they note. The risk is that as chip prices accelerate, smaller Taiwanese module makers could get squeezed by availability limits and margin pressure on larger customers.
PC OEM strength surprised. Acer and Asustek both performed above expectations, despite consensus remaining flat during the month. Wedbush attributes this partly to lower expectations after a strong first quarter, suggesting PC OEMs may be moderating builds. Yet the outperformance still exceeded what the analysts anticipated.
PCB laminate manufacturers, led by EMC and ITEQ, also exceeded expectations. Copper clad laminate remains constrained across the broader chip, board, assembly and test supply chain. The analysts expect this constraint to persist through 2026 and likely into 2027 as data centre AI demand remains robust, with potential additional support from edge AI, physical AI and optical applications.
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The currency backdrop provides modest headwind. The Taiwan dollar averaged 31.68 TWD per dollar in April, 0.6% stronger than March's 31.86 rate. The TWD has continued to strengthen in May, now trading near 31.567 per dollar. Currency strength erodes returns for Taiwan-listed exporters when converting foreign revenue back to Taiwan dollars, a headwind the strength of underlying demand is offsetting.
The outperformance has become systematic. For two consecutive years, Wedbush's Taiwan composite has beaten consensus estimates. The April acceleration suggests momentum is building heading into the second quarter, with memory pricing and server demand expected to remain robust. The question is whether smaller suppliers can maintain margins as the hyperscalers consolidate supply relationships and pricing volatility increases.