Taiwan's tech companies face unfair competition from Chinese rivals whose books don't add up, but Taiwan can win the next phase of the AI boom if it moves from just building hardware to actually using AI — good for Taiwan's industry if it pulls off the shift, bad for anyone trusting Chinese company earnings.

• Wistron chairman Simon Lin says many Chinese competitors are clearly losing money yet still report profits, because they operate on a government-business collusion model rather than audited books.
• Taiwan firms get copied and must follow the rules, so they are competing at a disadvantage — though how long China's edge can last is an open question.
• China's own market is brutal: companies there are losing money while staff still work 996 schedules, and Taiwanese firms operating in China say conditions are tough.
• Taiwan has so far only earned the "first wave" AI money from manufacturing hardware; the bigger prize is applying AI computing power across its existing industries.
• Lin wants tax breaks for companies that spend on AI computing instead of relying on government-bought capacity, and warns against over-relying on cheap Chinese AI models.

Outlook: Taiwan's hardware makers keep collecting AI manufacturing profits near-term, but the real upside depends on whether Taiwanese industry can retool itself around AI in the next few years.