Taipei: Taiwan's government should reassess its electricity demand projections, as power supply constraints have already affected Wistron Corp.'s plans to expand its AI computing infrastructure, Wistron Chairman Simon Lin said Friday.
According to Focus Taiwan, Lin addressed reporters following Wistron's annual shareholders' meeting, revealing that the company had initially intended to build its second computing center near its existing facility in Taipei's Neihu District. However, they altered this plan upon learning about the insufficient power supply. The new facility is now set to be located at National Yang Ming Chiao Tung University in Tainan.
Lin emphasized that Taiwan underestimated the electricity needed to support AI development at this stage, urging the government to rethink and adjust future electricity demand curves to accommodate the rapidly growing power consumption from AI computing. Concerns about Taiwan's power supply have become more prominent as demand from AI-related industries increases.
During an employee gathering in Taipei, Nvidia CEO Jensen Huang highlighted the need for more power to support AI development, reminding Taipei Mayor Chiang Wan-an of the growing energy requirements. Huang stated that while human labor needs rice, AI labor requires electricity, underscoring the importance of power in AI advancements.
Wistron, a leading AI server manufacturer in Taiwan, plays a crucial role in Nvidia's AI hardware ecosystem. Lin noted that the AI industry has significant growth potential, rejecting concerns about a potential bubble. He cited Huang's outlook, stating that companies not adopting AI would face challenges as the technology becomes more integral to business operations. AI applications are already gaining traction in Taiwan, particularly in the financial sector, where they are used for customer service and credit reviews.
As AI adoption grows, the demand for computing hardware such as GPUs, CPUs, TPUs, and memory will continue to rise, according to Lin. He also dismissed suggestions of Taiwan's recent stock market gains indicating overheating, arguing that large-cap technology stocks still trade at modest valuations.
Lin pointed out that despite the recent market rally, most heavyweight stocks, including Taiwan Semiconductor Manufacturing Co. (TSMC), are not trading at high price-to-earnings ratios. He highlighted that TSMC had previously traded at a P/E ratio of less than 20. Taiwan's industries remain robust and essential to global supply chains, with the market's performance reflecting the country's economic strength rather than speculative excess.