AI’s big questions for humanity and Japan’s startup mojo

Hi everyone, this is Cheng Ting-Fang, your #techAsia host this week, saying hello from Taipei, where we have had torrential rain and wildly volatile weather the past few days. It’s much like recent global stock markets, which have moved sharply on the smallest developments.

Several tech industry executives I spoke with over the past few weeks all shared a common message: Demand for AI infrastructure remains overwhelming and companies are scrambling to fill orders.

The first was Unimicron Technology, a key supplier to Nvidia and Intel. Taiwan’s largest maker of chip substrates and printed circuit boards has seen its market value soar about 350% this year amid the AI frenzy, and it has raised its capital spending plans twice to meet surging customer demand.

Yet for Unimicron’s new chairman, SC Chien, the biggest priority is not winning more customers but securing enough materials to keep production running. A soft-spoken and low-profile executive who served for years as co-CEO of United Microelectronics Corp. (UMC), Taiwan’s second-largest contract chipmaker, Chien said in a rare interview that one of his first tasks will be visiting key suppliers, many of them in Japan, to strengthen relationships and secure critical materials, as demand continues to outstrip supply.

“No matter whether it’s us or our customers, the key bottleneck currently is the supply chain,” Chien said. “My priority is to meet with our suppliers’ management teams and build trusted partnerships to ensure their support.”

As artificial intelligence continues to dominate the tech industry, some conversations have turned philosophical. Leuh Fang, chairman of Vanguard International Semiconductor, a Taiwan Semiconductor Manufacturing Co. affiliate focused on power management and specialty chips, said the current supply gap is wide and the only “dark cloud” he sees on the horizon is persistent inflation, which could eventually weigh on the broader economy. Vanguard’s market cap has surged over 110% this year.

Beyond that, however, Fang described the AI revolution as a “tsunami” in human history that could fundamentally reshape how we live, learn and work, redefining the very nature of our existence.

“None of the industrial revolutions in the past had the potential to replace human intelligence or reach the level of human intelligence,” Fang said.

“If AI continues to become smarter, able to write poetry, paint pictures and compose music at a professional level, then think about the children who are born 20 years from now. The world they face will be vastly different from today’s, and there may be only very few people who can outperform AI for intelligence. And that could cause some trouble,” he said.

“When AI can so easily reach that level of intelligence, replace the brain, arms and legs, we have to ask whether the very value of human existence could be challenged,” the industry veteran added.

Konrad Young, a former executive at both TSMC and Intel who now serves as professor and CEO of the College of Industry-Academia Innovation at the National Taiwan University of Science and Technology, voiced similar concerns.

“We are already seeing profound changes in hiring and the job market in the U.S.,” Yang said. “In some industries, labor shortages have turned into oversupply almost overnight. What the U.S. is experiencing today could eventually spread to Asia, even if changes in the manufacturing sector happen more gradually.”

Yang believes there is still time to prepare, but only if governments, educators and businesses begin adapting now. “We can no longer rely on the same textbooks or teach in the same way we did in the past.”

Xiaomi cuts back, Apple goes big

Some of the world’s leading smartphone makers are among the biggest casualties of the global AI infrastructure boom, as soaring demand for memory chips and other key components squeezes supplies for price-sensitive consumer electronics.

Xiaomi, China’s largest smartphone maker and the world’s third-largest player, has told suppliers it will further cut its full-year production target by nearly 30% to about 95 million units, on top of reductions made earlier this year, Cheng Ting-Fang and Lauly Li of Nikkei Asia write in this exclusive report. Fellow Chinese handset makers Oppo and Vivo have also scaled back their production plans to below 90 million units, according to industry sources.

Research companies now expect the smartphone market to suffer its worst-ever annual decline this year, with shipments falling about 14%, and some forecast the downturn could extend into 2027 if component shortages worsen.

Apple, meanwhile, is taking a different approach. The Cupertino, California-based company is preparing at least five new iPhone models for its flagship September launch and next spring, a more aggressive rollout than in a typical product cycle, Li and Cheng reported in another Nikkei Asia scoop. Backed by its better market position and bargaining power over suppliers, Apple is aiming to gain market share at the expense of smaller rivals.

South Korea’s new hub

South Korea has announced a nearly $600 billion plan for the world’s two largest memory chip makers to significantly expand capacity as the AI boom exacerbates chip shortages, writes the Financial Times’ Song Jung-a.

Samsung Electronics and SK Hynix will invest a combined 911 trillion won ($590 billion) alongside the government to build chipmaking facilities in underdeveloped parts of South Korea, President Lee Jae Myung said on Monday.

The investment pledges are part of the president’s “Three Mega Projects for the Great Leap Forward” initiative aimed at building up the country’s capabilities in semiconductors, AI data centers and robotics.

The plan is also part of Lee’s effort to rebalance economic growth, which is historically concentrated around Seoul. Samsung and SK Hynix have major chipmaking facilities in the capital region.

South Korea was “at a turning point for a new great leap forward,” Lee said. “We must swiftly complete the chip production hubs under construction and secure overwhelming manufacturing capacity through large-scale investment in the southwest.”

Samsung and SK Hynix will each build two chipmaking plants for a total of 800 trillion won in the country’s southwestern region, while 81 trillion won will be spent on constructing a chip-packaging cluster in the central region.

Winners and losers

Several Asian stock markets delivered standout performances in the first six months of 2026, led by South Korea, Taiwan and Japan, as investors poured money into the region’s tech leaders amid the massive buildout of global AI infrastructure, Jada Nagumo of Nikkei Asia reports.

South Korea’s KOSPI, Taiwan’s Taiex and Japan’s Nikkei Stock Average repeatedly hit record highs in the first half thanks to their central roles in the artificial intelligence supply chain, but that also brought a lot of volatility to the market. Indonesia, on the other hand, suffered a significant decline, making it one of Asia’s worst performers amid policy uncertainty and a downgrade to its sovereign outlook by global credit rating agencies.

Most Asian currencies weakened in the first half of 2026, as the Iran war drove investors toward the safe-haven U.S. dollar and the Federal Reserve’s rate-hike outlook further strengthened the greenback.

Innovative again?

Japan’s startup ecosystem lost much of its momentum after the 1990s, but enthusiasm for entrepreneurship is making a comeback. Some of Silicon Valley’s best-known venture capital companies are increasingly looking to the country as a promising destination for the next generation of startups, Nikkei Asia’s Mitsuru Obe writes.

The government has also stepped up. Expanded subsidies for university startups, for example, have helped more than double the number of such spinouts over the past five years.

Still, in terms of unicorns, or startups valued at more than $1 billion, Japan trails Asian peers such as China and India. To spur innovation, the government recently unveiled a strategy to mobilize more than $2.3 trillion in public and private investment over the next 14 years, targeting AI-powered robotics, semiconductors, drug innovation, autonomous driving and advanced batteries.

Podcast: Tech Latest

The startups giving Australia’s working dogs a high-tech hand

Welcome to the Tech Latest podcast. Hosted by our tech coverage veterans, Katey Creel and Shotaro Tani, every Tuesday we deliver the hottest trends and news from the sector.

In this episode, Katey speaks with Australia correspondent Shaun Turton about how drones and AI are transforming Australian livestock management, and whether the traditional working dog will remain indispensable as technology and labor shortages reshape the industry.

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