Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers.
The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform.
Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said.
Photo: Taipei Times
The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits and other related solutions, Pegatron cochief executive officer Gary Cheng (鄭光志) told an earnings conference.
The AI server business would face gross margin pressure in the short term as this segment requires significant infrastructure investment, but it would improve beyond industry averages in the long term, Cheng said.
Aside from AI servers, demand for general-purpose servers is also expected to rise, as AI training and inference — which require massive data processing — would boost demand for storage and enterprise information technology infrastructure, Cheng added.
In contrast, Pegatron faces seasonal headwinds in its computer business — PCs and notebook computers — and expects revenue this quarter to decline by a double-digit percentage from the previous quarter, before seeing a recovery next quarter on AI PC demand, Pegatron cochief executive officer Johnson Teng (鄧國彥) said.
The company’s consumer electronics and communications segments are also expected to see revenue declines compared with the previous quarter due to seasonality, Teng said.
PC sales this year are subject to the effects of geopolitics and memory shortages, with shipments likely to either grow or decline by a single digit percentage from last year, with many clients having brought forward orders since last quarter, he said.
Additionally, PC price hikes might affect the consumer PC segment more than the commercial PC segment, as Pegatron’s main clients are enterprises and government agencies, Teng said.
So far, the tension in the Middle East has not caused a major impact on Pegatron’s performance, but if the war extends longer than expected, it could weigh on the supply of raw materials, he said.
Pegatron yesterday reported net profit of NT$5.27 billion (US$165.96 million) in the fourth quarter of last year, up 15.9 percent quarter-on-quarter and 40.9 percent year-on-year.
Earnings per share improved to NT$1.97 from NT$1.69 in the previous quarter and NT$1.4 a year earlier.
Fourth-quarter revenue fell 2.3 percent year-on-year to NT$319.52 billion, with communications products accounting for 62 percent of the total, followed by computing goods at 15 percent and consumer electronics at 7 percent.
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