Lite-On Technology Corp (光寶科技) yesterday said that demand for artificial intelligence (AI) infrastructure is expected to remain resilient over the next two years, although the escalating Middle East conflict could increase operating costs for consumer electronics markets.
The pressures from the fighting are expected to push up costs and further weigh on consumer electronics demand already pressured by memory shortages, Lite-On president Anson Chiu (邱森彬) told a news conference in Taipei.
The company had already adopted a conservative outlook for the segment earlier this year, even before the outbreak of the war, and the situation has since worsened as rising raw material costs add further pressure, Chiu said.
Photo: CNA
Lite-On has been adjusting its strategy for such products, shifting away from pursuing high-volume shipments in the mass market toward higher-value products with greater technological barriers, he said.
The company sees strong demand for AI infrastructure over the next two years, given sizable capital expenditures set by major cloud service providers, he said.
One of Lite-On’s largest customers has orders covering at least the next year and a half, with shipments doubling and even tripling from original expectations, he said.
The company’s new 110 kilowatt power shelves — designed mainly to support Nvidia Corp’s Vera Rubin AI server platform — are expected to boost its AI business, Chiu said.
Based on customers’ latest forecasts, demand in the second half of this year is expected to be stronger than anticipated in the fourth quarter last year, mainly driven by upgrades in power shelf specifications and rising demand for new models, he said.
To meet customers’ demand, Lite-On’s new Kaohsiung plant is expected to begin operations in August, while additional manufacturing capacity in Vietnam could come online as early as the third quarter, he said.
Supply of the company’s new power shelf products is expected to remain tight in the near term, but could begin to ease in the second half of this year after the new capacity comes online, Chiu said.
Regarding the company’s backup battery unit business, Lite-On plans to expand production lines to about 12 this year, including four in Taiwan and four in China, he said.
The company’s new capacity in the US would aim for greater automation, Chiu said. Lite-On plans to acquire an additional plant in North America, alongside its facility in Plano, Texas, with new capacity for higher-power products such as power racks expected to come online as early as next year, he said.
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