Quanta sold $1 billion in convertibles last month. Taiwan’s tech firms are tapping dollar markets fast.

Convertible boom driven by AI spending and FX hedging

Three big names — Quanta Computer, Hon Hai Precision Industry and Wiwynn — have all turned to convertible bonds to raise dollar cash this year. The moves come as chipmakers and server suppliers rush to expand capacity for artificial intelligence equipment, and as companies look to protect themselves from a weaker New Taiwan dollar. Issuing in US dollars helps firms hedge currency risk, and convertibles usually come with lower interest costs than straight debt.

Quanta filed to sell up to US$1 billion of convertible notes, saying proceeds will help buy raw materials. Hon Hai raised US$700 million through a convertible offering that carries a zero coupon and a conversion price set at NT$300 per share, according to a company filing reported by Lisa Wang of the Taipei Times. The company said the dilution would be limited — about 0.54 percent if fully converted — and that the bonds will list on the Singapore Exchange with an Oct. 24, 2029, maturity.

Taiwanese issuers have already sold more US dollar convertible paper this year than they did in each of the past two years, Bloomberg data compiled for the Taipei Times showed. So the surge is measurable: about US$1.3 billion of US dollar-denominated convertibles have been placed so far, and additional share sales in the same currency topped US$2.9 billion, the data showed. Those totals reflect not just one-off deals but a broader funding pattern tied to AI investment and currency moves.

Why convertibles fit the moment

Companies need cash to buy costly AI parts like servers, chips, and memory, and convertibles offer a practical way to raise that money. They let firms borrow at lower coupons because buyers accept an equity kicker, and they give investors upside if the stock runs. Brian Chau, cohead of Asia equity-linked deals at UBS Group AG, told Bloomberg that the AI theme represents "a fundamental change to the business mix and capital expenditure needs for the Taiwanese companies," and that he'll see the trend shape Taiwan's equity capital markets for years.

Rob Chan, head of equity-linked origination for Asia Pacific at Citigroup Inc., said buyers in recent share sales include sovereign wealth funds and long-only funds seeking AI exposure who historically hadn’t invested in these names. That mix of long-term investors has helped deals clear even in a higher-rate environment.

Foreign demand and oversubscriptions

Citigroup’s Taiwan country officer, Christie Chang, described a sharp increase in activity. Speaking in Taipei, Chang said the bank saw record client revenue in Taiwan and that investment banking results were "particularly eye-catching." She added that nearly every recent deal has been oversubscribed, citing heavy interest from global funds and some hedge funds looking to build long exposure to Taiwan’s tech leaders.

International demand comes partly from funds looking for returns and partly from investors shifting to tap into AI supply-chain growth. Taiwan Semiconductor Manufacturing Co.'s U.S.-listed shares have jumped this year, and Quanta’s Taipei-listed stock has climbed on investor bets that server and laptop suppliers will benefit from the AI cycle. Those stock moves make the equity conversion feature more attractive to investors, and they make convertibles an efficient way for companies to raise money without paying the full cost of plain-vanilla bonds.

Companies using proceeds and the FX angle

Issuers say the money will mostly go to raw materials and components bought overseas. Quanta and Hon Hai cited raw-material purchases in their filings; Wiwynn used proceeds to cope with rising component costs for AI servers. The dollar issuance helps firms hedge against a New Taiwan dollar that has weakened around 5 percent this year, according to Bloomberg reporting in the Taipei Times. That currency slide is the second-worst performance in Asia after the South Korean won, and it pushes corporates toward dollar funding.

Issuing convertibles helps companies cut down on interest expenses. Hon Hai’s zero-coupon structure is a clear example — the company argued the approach would cut interest costs and have only minimal dilution. Wiwynn’s US$600 million sale and Quanta’s US$1 billion issue follow the same logic: save on cash interest now while leaving an equity conversion option on the table for investors.

Deal mechanics and market players

Underwriters and banks have been busy. Citigroup participated in major convertible transactions for both Quanta and Wistron, the TradingView report said, and Dealogic and the Taiwan Stock Exchange data cited by the same report indicate equity-linked offerings raised more than US$5 billion in 2025 after US$6.6 billion the year before. That sequence shows the market’s scale is expanding, not shrinking.

Buyers include a mix of sovereign wealth funds, long-only asset managers and hedge funds. Rob Chan at Citigroup noted that some of those investors — the ones seeking AI exposure — historically hadn’t bought these Taiwan names, but are now participating to gain long-term shares in companies tied to AI infrastructure. The result: oversubscriptions and tighter pricing in many deals.

But market ups and downs might slow things down. Global pullbacks in AI-related stocks have trimmed momentum at times, and that may slow some planned fundraises. Brian Chau warned that a near-term slowdown in fundraising is possible if AI stocks retreat sharply. But he expects further share sales and convertible deals across the next 12 to 18 months as firms keep raising cash for capex.

What investors and issuers are watching

Investors are watching conversion premiums and dilution calculations closely. Hon Hai’s conversion price equated to a roughly 43.8 percent premium versus its closing Taipei share price at the time of its filing, according to the Taipei Times report from Lisa Wang. That premium and the zero coupon made the package more palatable for both the company and buyers focused on future upside.

Issuers, meanwhile, are balancing foreign funding benefits against currency risk and political uncertainty. Citigroup’s Christie Chang told the TradingView audience that geopolitical tensions and regional drills haven't changed the bank’s internal targets for Taiwan, and that AI-related data-center investment continues to flow. Banks are also seeing fresh demand for services such as foreign exchange and local liquidity as companies expand internationally and adjust capital structures for growth.

Back on the trading desks, the appetite for Taiwan tech stories shows few signs of ending. But some deals will hinge on how AI earnings and capex plans actually materialize in the coming quarters. Quanta, Wiwynn and Hon Hai all framed their offers as tactical responses to component shortages and higher import bills — not as stopgaps — and that claim helps explain why long-term funds are comfortable taking equity risk through convertibles.

Point is, the convertible market has become a core financing channel for Taiwan’s tech ecosystem, and both banks and institutional buyers are adapting fast to it.

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"Nearly every recent deal has been oversubscribed," Christie Chang, Citigroup Taiwan country officer, said.