Compal Electronics Inc (仁寶) yesterday said it is targeting revenue of NT$1 trillion (US$31.6 billion) for this year, backed by forecast “explosive growth” in its artificial intelligence (AI) server business in the second half of the year.
The company’s revenue last year fell 17 percent year-on-year to NT$757.51 billion.
Compal is stepping up investment in AI-related transformation, including technology development, factory automation and internal management upgrades, company chairman Ray Chen (陳瑞聰) said at a company event in Taipei.
Photo: Fang Wei-chieh, Taipei Times
The company aims to transform into an AI-focused enterprise from a traditional contract manufacturer, he said.
AI servers are projected to account for about 80 percent of its total server revenue this year, up from about 20 percent at the end of last quarter, and would see double-digit percentage growth from last year, Chen said.
Compal launched a US$500 million expansion project in Texas last year, which is expected to begin mass production in the second quarter this year, he said.
The new facility mainly produces “Level 10” and “Level 11” servers, he added.
The company’s server business this year would continue to focus on graphics processing unit-based systems, but it is also in talks with several tier-one cloud service providers and original equipment manufacturers on production of application-specific integrated circuit-based servers, Compal president Anthony Peter Bonadero said.
The company would continue to invest in the US this year, but not necessarily in Texas, Bonadero said, adding that the company is looking for a bigger factory in Taoyuan for capacity expansion, including surface-mount technology assembly lines and printed circuit board capacity.
Compal is also accelerating capacity expansion in Vietnam, and the company’s motherboard production would remain concentrated at its Asian sites, he said.
The company’s overseas capacity expansion underlines growing customer requests for a more geographically balanced manufacturing footprint to avoid overconcentration in a single location, Chen said.
Given rising memorychip prices, International Data Corp forecast that global shipments of notebook computers would contract by 9 to 10 percent this year.
However, Compal is more optimistic, expecting shipments would contract by a low single-digit percentage, Chen said.
The company’s notebook business would remain flat or post slight growth this year, he said.
The memorychip issue is manageable for now, with the industry responding by adopting leaner configurations, more aggressive pricing strategies and tighter supply management, Bonadero said.
Compal has maintained close communication with the three major memory suppliers to ensure stable supply, he said.
However, rising memory prices could persist into next year or even 2028, given ongoing supply constraints and strong demand from AI-related applications, he said.
This year, AI PCs are expected to account for 50 to 60 percent of the company’s total PC shipments, as persistent demand for edge AI and industrial AI PC applications has helped the company secure new orders, Bonadero said.
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