Taiwan's tech sector is booming as TSMC pushes silicon photonics, and that's good news for a long list of local suppliers — but a few warning lights are flashing in US bonds and Taiwan's mortgage market.

• AI data centers are hitting the limits of copper wiring, which runs hot and wastes power, so TSMC is moving to send data with light instead.
• The shift lifts a whole chain of Taiwanese firms: MediaTek on chip design, ASE on advanced packaging, Largan on optical modules, plus testing, materials and laser-chip makers.
• Taiwan's market keeps setting records, with AI-themed ETFs up more than 70% this year and a few nearly doubling; some analysts see the index eventually reaching 80,000.
• US 30-year government bond yields just hit their highest level since 2004, and former Lehman trader Larry McDonald compares the setup to the days before the 1987 crash.
• Taiwan's regulator found a bank had misreported mortgage data for years; corrected numbers show bad home loans at a five-year high, though overall loan quality still looks fine.

Outlook: The optical-connection buildout should keep driving orders through next year, but high US bond yields are the main thing that could spoil the rally.