MediaTek Surges 19% on AI Chip Collaboration With Google

Taiwan's MediaTek saw its shares jump 19% over two trading sessions, closing at a record high after reports of deepening ties with Google for AI-specific tensor processing units. The rally lifted the broader Taiex Index to unprecedented levels as institutional investors rotated into MediaTek amid capped exposure to TSMC.

Fund managers are reallocating capital from TSMC, which now represents nearly 12% of major Asian indices, toward MediaTek as the latter gains credibility in AI chip development. Morgan Stanley analysts highlight MediaTek's growing potential in custom AI processors, with the Google partnership serving as a key catalyst.

The shift reflects constrained buying capacity for TSMC among index-tracking funds, forcing active managers to seek alternative semiconductor plays while maintaining Taiwan market exposure. MediaTek's surge underscores the market's appetite for AI-related chipmakers beyond the traditional foundry leaders.