As investment in artificial intelligence (AI) servers tilts toward high bandwidth memory (HBM) and cutting-edge nodes, Taiwan's semiconductor ecosystem is enjoying unexpected spillover gains. While the market's gaze rests on advanced chips such as the 2-nanometer node and HBM, the trickle-down effect is spreading in all directions to legacy memory that had been overshadowed by TSMC, back-end (OSAT), and testing. The AI boom is creating bottlenecks across the supply chain, boosting the pricing power of Taiwan's small and mid-sized firms and further cementing the grip of Taiwan's semiconductor cluster.
The area where the benefits are becoming visible is the legacy memory market. As Samsung Electronics, SK hynix, and Micron— the big three in memory— concentrate production capacity on higher-margin HBM and DDR5, supply capacity for general-purpose products with relatively lower added value, such as DDR3, DDR4, and SLC NAND, is rapidly shrinking. Taiwan-based companies like Nanya Technology and Winbond are absorbing this gap. In March, Nanya's sales surged 560% from a year earlier, emerging as a prime beneficiary of rising legacy DRAM prices. There is even talk that Nanya may be included in the LPDDR supply chain for Nvidia's next-generation AI accelerator platform "Rubin," signaling a shift in its standing in the market.
Winbond's strong performance also stands out. While global NAND flash makers focus investment on high-stack three-dimensional (D) NAND, Winbond is emerging as a beneficiary of the supply shortage in SLC NAND and NOR flash used in industrial and automotive devices.
Industry watchers interpret their resurgence not as a result of technological innovation, but as a "paradoxical boom" born of supply chain bottlenecks. Nanya and Winbond have long centered their business structures on legacy processes around the 20-nanometer class, revealing profitability limits during downturns. Even so, global customers are showing interest in securing volumes from these companies, which underscores that shortages of general-purpose products are deepening as the big three in memory shift production capacity toward higher value-added products. As the market prioritizes stable volume procurement over top-tier performance, the status of Taiwan's once-sidelined legacy product lineup is changing.
In the back-end, the competitiveness of Taiwan's ecosystem is emerging as even more formidable. As TSMC books more AI chip orders, bottlenecks in advanced packaging such as CoWoS intensify, and the roles of Taiwan's OSAT companies including ASE, Powertech, and KYEC are growing. Taiwan's distinctive cluster— seamlessly linking design (fabless), manufacturing (foundry), packaging (OSAT), and testing within a single region— has formed a barrier to entry in delivery times and quality control that a dispersed supply chain finds hard to match. With the AI boom as a catalyst, analysts say the "Taiwan semiconductor fortress," binding TSMC with its surrounding ecosystem, is becoming even more solid.
Some warn that this trend could pose a mid- to long-term risk to Korea's semiconductor industry. While focusing on high-margin advanced products is a rational short-term strategy, the "strategic vacuum" created in the process is having the side effect of strengthening the self-sufficiency of Taiwan's legacy players. In particular, for product categories with long replacement cycles— such as automobiles, industrial equipment, and home appliances— once a supply chain changes, it is hard to reverse. Because component certification and quality verification take years, if Taiwan's companies lock in customers with long-term contracts, Korea's companies may find it difficult to win back this market later.
A semiconductor industry official said, "While attention is fixed on the HBM gap, Taiwan's foothold is expanding in the general-purpose memory and back-end markets," and added, "If Korea is pulling ahead in HBM, which is like a fight for the high ground, Taiwan is reaping practical gains by seizing the entire supply chain, which corresponds to the supply lines."