Quanta Computer Inc (廣達), which supplies artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it would hike capital expenditure this year by about 40 percent annually to NT$20 billion (US$660.4 million) to keep pace with growing server demand from customers including the world’s major cloud service providers (CSPs).
The company’s move came after capital spending soared about 80 percent last quarter to NT$4.7 billion from NT$2.6 billion in the corresponding period last year. Last year as a whole, Quanta spent NT$14.2 billion on new facilities and equipment.
Quanta said it is seeing CSPs maintain heavy investment in AI servers and data center infrastructure.
Photo courtesy of Quanta Computer Inc
The recent capital expenditures guidance from top US hyper-scalers confirmed that they are either maintaining or raising capital expenditure for AI devices this year, it added.
Top CSPs said they are increasing capital expenditure, albeit at a slower pace, and “that’s why we are saying the demand is still there,” Quanta chief financial officer Elton Yang (楊俊烈) told an online conference.
However, shipments of AI server racks would still be subject to the availability of chips, Yang said.
Quanta said it started ramping up production of new AI servers based on Nvidia’s GB200 chips late last quarter, but supply constraints of chips and other components are curbing output.
For the current quarter, Quanta expects demand for GB200-based servers to outpace that for servers powered by Nvidia’s previous-generation Hopper-series chips.
As a result, AI server revenue contribution this quarter would be higher than the 60 percent of total server revenue last quarter, as the company is on track to hit the 70 percent target this year, Quanta said.
However, rising demand for new-generation AI servers is expected to squeeze gross margin going forward, after it improved to 7.92 percent last quarter from 7.45 percent the previous quarter.
Gross margin was 8.48 percent in the first quarter last year, the company said.
Servers have become the largest revenue source for Quanta, accounting for about 70 percent of its total revenue last quarter. Notebook computers’ revenue share dropped to less than 25 percent, it said.
Quanta expects notebook shipments to expand by at least a high-single-digit percentage this quarter from 10.8 million units last quarter, thanks to front-loading demand from customers during the 90-day pause on US tariffs.
That might lead to a “muted” seasonal demand in the second half of this year, Quanta said.
Quanta said its operating margin could be under pressure, as it is boosting research-and-development spending in preparation for the production of next-generation AI servers powered by GB300 chips, adding that operating expenses surged 35.4 percent annually to NT$13.88 billion last quarter.
The company’s net profit in the first quarter hit the highest in the company’s history at NT$19.5 billion, surging 61.6 percent annually from NT$12.07 billion, or sequential growth of 22.8 percent from NT$15.87 billion.
Earnings per share rose to NT$5.06 from NT$3.13 a year earlier and from NT$4.12 a quarter earlier.
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
Taiwan should increase its geothermal development investment, as its stable output could complement the nation’s fast-growing solar and wind power capacity, an international consultant said last week. COWI A/S Asia-Pacific business development director Vun Pui-lee (溫沛理) at an event hosted by the Trade Council of Denmark, Taipei said that geothermal systems offer consistent heat flow and round-the-clock generation. “The output of geothermal power is like natural gas; the volume of hot water you have and its temperature are both stable and constant,” he said. Such steadiness could enhance Taiwan’s energy resilience during geopolitical uncertainty, he added. “A liquefied natural gas terminal might not be
RSS