Wistron Corp (緯創) yesterday said it is highly optimistic about its artificial intelligence (AI) server business this year, as widening AI applications boost demand for servers that utilize graphics processing units (GPUs) and application-specific integrated circuits (ASICs).
The company expects last year’s robust growth momentum, with revenue posting triple-digit percentage growth, to carry over into this year, Wistron president Jeff Lin (林建勳) said.
Wistron is “very positive” about revenue growth from AI servers, as it is well-positioned to benefit from its major clients’ rapid expansion, Lin said.
Photo: CNA
The company counts Nvidia Corp, Dell Technologies Inc and Advanced Micro Devices Inc (AMD) as its main AI server clients.
Asked about reports that Nvidia might start selling fully integrated Level 10 Vera Rubin server systems — pre-installed with components such as Vera CPUs, Rubin GPUs, cooling systems and various interfaces — and how it might affect profitability, Lin said that Wistron does not expect gross margin to drop sharply to 3 or 4 percent as it did before as the complexity of assembling AI servers increases.
In terms of capital expenditure, Taiwan would remain the group’s primary investment base, drawing more than half of its planned spending to support customers’ expansion in the nation, he said.
In the US, Wistron’s new Texas plant is expected to enter mass production in the first half of this year, he said.
The newly added Texas facility leverages faster access to power and proximity to the market, focusing on later-stage assembly, testing and delivery to serve North America’s AI server market and improve overall delivery efficiency, he said.
Over the long term, Wistron is considering increasing its US capacity allocation to cope with rising customer demand, he said.
Meanwhile, its networking business is ramping up, with shipments expected to grow 10 times from last year, the company said.
The networking business would be another growth driver, with the company mainly supplying major North American networking companies, whose products are used in cloud service providers’ data centers, Lin said.
As for notebook computers, Wistron was cautious, as tightening memorychip supply and surging prices could push up end-product costs and dampen consumers’ willingness to upgrade, creating uncertainty for overall sales this year, he said.
Nonetheless, the impact would be less severe on Wistron compared with its peers, as it focuses on mid-to-high-end commercial models, which are less price sensitive than entry models, Lin said.
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