Sat, Sep 28, 2024 page12

• AI boosts Yageo’s revenue

  CUTTING EDGE: Despite fierce competition from firms in China, Yageo has established itself as one of the top suppliers to global hyperscalers and tech companies

  • By Lisa Wang / Staff reporter
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  Yageo Corp (國巨), one of the world’s top three passive component suppliers, said its products have been widely used in artificial intelligence (AI) applications, including servers powered by Nvidia Corp’s AI chips, which has helped to boost its AI-related business’ revenue contribution to about 5 percent.

  This growing revenue from AI has been one of Yageo’s major achievements of the past six years, as the company transforms itself into a premium passive component supplier and shakes off cut-throat price competition from Chinese rivals in the standard components segment, Yageo chairman Pierre Chen (陳泰銘) told reporters on the sidelines of an AI summit arranged by the company in Taipei on Thursday.

  Yageo has also dramatically reduced China’s revenue contribution to about 24 percent last year, versus as high as 78 percent in 2017, Chen said.

  

  Yageo chairman Pierre Chen attends an artificial intelligence summit in Taipei organized by the passive component producer on Thursday.

  Photo: CNA

  As part of its efforts to expand its product spectrum, Yageo dived into the AI sector about five years ago, concentrating on developing components and technologies to enhance power efficiency for AI applications, Chen said.

  In Taiwan, Yageo has risen to become the largest supplier of X6S multilayer ceramic capacitors (MLCC), a high-capacity MLCC that is used in AI servers, Chen said.

  “We have been deeply involved in the AI [sector]… Yageo will not be absent from any areas linked to AI applications,” he said.

  “A majority of the market’s main AI players are our customers from Taiwanese assemblers to overseas AI companies,” he added.

  As a long-term supplier to Nvidia, Yageo has also expanded its ability to supply high-capacity MLCCs for Nvidia’s latest and most powerful GB200 superchip through companies on Nvidia’s approved vendor list, the company said.

  Global hyperscalers such as Amazon.com Inc and tech giants such as Meta Platforms Inc and Microsoft Corp are keen on investing in servers and data centers to help customers doing AI training and referencing over the next few years.

  Chen said that he expected Yageo to benefit from this AI boom.

  Yageo develops passive components to enhance power management and power efficiency for customers’ AI products to address the power consumption issue, it said.

  Last year, Yageo was the world’s biggest producer of polymer tantalum, which is mainly used in AI servers.

  Aside from servers, Yageo’s components also can be found in a wide range of chips that are used in laptops, accelerator cards, switches and autonomous vehicles.

  “Yageo now is not the company as it was known 10 years ago,” Chen said.

  The MLCC business only accounts about 17 percent of the company’s total revenue, as it has broadened its product portfolios through a series of mergers and acquisitions, Chen said.

  In 2017, it accounted for half of the company’s overall revenue.

  Magnetic components were Yageo’s biggest revenue source at 30 percent during the first half of this year, company data showed.

  As supply chain management becomes an increasingly complicated challenge, Yageo has been tasked to provide a total solution to customers, Chen said.

  Passive components only make up a mere 5 percent of customers’ component costs, he added.
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