Taiwanese technology firms reported August sales patterns that underscore a bifurcated market: AI and cloud server-related demand is supporting semiconductor vendors even as PC and smartphone-exposed businesses weaken, according to analysis by Raymond James.
Semiconductor suppliers broadly showed resilience, but cracks appeared where exposure to PCs and handsets is higher. Through the first two months of the third quarter, about 74% of vendors posted growth exceeding the five-year seasonal average - a decline from the 87% of vendors beating seasonal norms in both the first and second quarters of 2026.
Memory vendors continued to deliver solid revenue gains, though the pace has slowed. For three tracked memory companies, revenue climbed 51% sequentially through the first two months of the third quarter. That compares with average sequential growth of 60% in the second quarter and 69% in the first quarter. Commentary from AMD, Intel and Arm suggested memory supply remains constrained, with available product being prioritized for server platforms and AI use cases rather than PCs and personal devices.
Suppliers that provide components for cloud and AI servers fared particularly well. All firms in this group reported revenue above seasonal expectations in August, a step up from the 75% and 50% of cloud vendors that exceeded seasonal trends in the second and first quarters, respectively.
An example of accelerating AI-related demand is ASIC design house Alchip, which reported adjusted sequential quarterly growth of 299% - more than tripling from the 82% sequential growth recorded in the second quarter.
By contrast, the PC market softened. Around 51% of PC-exposed vendors reported sales below seasonal norms in August; earlier in the year, during the first quarter, all PC-exposed vendors had been reporting above-average seasonal trends.
Smartphone-related sales also showed deterioration. Through the first two months of the third quarter, roughly 57% of mobile-exposed vendors recorded revenue below seasonal expectations, compared with 29% in the second quarter. The scarcity of memory supply that is being funneled into servers and AI data center deployments was cited as a factor limiting allocations to mobile devices.
The mixed picture highlights a market where demand for AI and cloud infrastructure is lifting suppliers tied to data centers, while consumer-facing segments such as PCs and smartphones are experiencing softer demand and constrained component allocations.
Summary
August sales in Taiwan showed continued AI-related strength among semiconductor and cloud server suppliers, slower but positive memory growth, and weakening trends in PC and smartphone segments.
Key points
- Semiconductors overall remain strong, but fewer vendors are outperforming seasonal averages compared with earlier in the year.
- Memory revenue rose 51% sequentially through the first two months of Q3 for three tracked vendors, decelerating from prior-quarter gains.
- Cloud and AI server component suppliers reported uniform above-seasonal growth; PC and smartphone-exposed vendors showed notable softness.
Risks and uncertainties
- Allocation of limited memory supply to servers and AI deployments could continue to restrict component availability for PCs and smartphones, affecting those vendors' sales.
- If seasonal outperformance among semiconductor vendors continues to decline, broader industry revenue momentum could be at risk.
- Weaker consumer device trends - in PCs and mobile phones - introduce uncertainty for firms with heavy exposure to those end markets.