MediaTek’s AI Pivot Sparks 19% Rally as Funds Seek TSMC Alternatives
MediaTek shares surged 19% following its Google AI partnership announcement, with the rally fueled by growing demand for its tensor processing units (TPUs). The move marks a strategic shift from smartphone chips to custom AI hardware - precisely the sector institutional investors are chasing as TSMC reaches allocation limits.
Taiwan's chip sector rode the wave, with Nanya Technology and United Microelectronics also gaining. But MediaTek's transformation into an AI hardware contender makes it the standout. Morgan Stanley analysts highlight 'large potential' in its application-specific AI chips, noting the Google deal could be transformative.
The rally reflects a broader market dynamic: with TSMC now comprising 12% of key indexes and many funds hitting single-stock exposure limits, managers are forced to seek alternative plays. MediaTek's AI capabilities position it as a prime beneficiary of this rotation.