Quanta Computer Inc (廣達) yesterday said artificial intelligence (AI) server revenue this quarter would continue to grow by a double-digit percentage sequentially, after server revenue last quarter increased by 30 percent quarter-on-quarter and accounted for 75 percent of total server revenue.
Servers accounted for 80 percent of Quanta’s first-quarter revenue, which increased 66.6 percent year-on-year to NT$809.22 billion (US$25.68 billion), a record quarterly high, the company said.
The company has become more optimistic about the AI server market compared with three months ago, as major cloud service providers now have clear order visibility through 2028, Quanta chief financial officer Elton Yang (楊俊烈) said at an earnings conference.
Photo courtesy of Quanta Computer Inc
Quanta maintains a triple-digit growth forecast for AI server revenue this year, as some orders shift to “consignment” transactions from previous “buy-and-sell” arrangements, Yang said.
High-priced AI server racks can significantly boost revenue, but weigh on margins under the buy-and-sell transactions, he said.
Quanta has negotiated with customers to shift toward consignment deals to lift margins, and expects some orders under consignment trades to start in the second half of this year, he added.
While the transition between AI servers powered by Nvidia Corp’s GB300 and GB200 platforms also weighed on margins due to higher component costs, the impact is expected to ease this quarter as the share of the GB300 platforms increases, Yang said.
Quanta also expects more shipments of servers powered by application-specific integrated circuits this year to help improve product mix and margins, he said.
As for general-purpose servers, shipments this quarter are expected to grow further and full-year shipments are predicted to show double-digit annual growth, he added.
Notebook computer sales this quarter are said to be flat or slightly higher than the previous quarter, Quanta said, after accounting for less than 15 percent of total revenue last quarter.
The company allocated NT$8 billion for capital expenditure in the first quarter to expand AI capacity in the US and Thailand.
The figure is expected to rise to NT$30 billion this year, as the company aims to double its AI-related capacity this year from last year, he said.
Quanta’s board of directors yesterday also approved injecting US$800 million into three wholly owned overseas subsidiaries, mainly for its US expansion, the company said.
The company’s net profit in the first quarter increased 8.7 percent year-on-year, but fell 4.5 percent quarter-on-quarter to NT$21.19 billion. Earnings per share rose to NT$5.5 from NT$5.06 a year earlier, marking a record high for the period, but slipped from NT$5.76 in the previous quarter. Gross margin fell to 4.78 percent from 7.92 percent a year earlier and 6.33 percent in the previous quarter.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS