Inventec expecting a stronger 2027, despite component shortages

• By Meryl Kao / Staff Reporter

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Contract electronics manufacturer Inventec Corp (英業達) yesterday said server shipments and revenue this quarter are expected to grow year-on-year, but remain flat quarter-on-quarter, as client demand remains strong.

The company holds a positive outlook for its server business next year, with graphics processing unit (GPU)-based and application-specific integrated circuit (ASIC)-based servers forecast to post high double-digit year-on-year growth, Inventec president Jack Tsai (蔡枝安) told an earnings conference in Taipei.

Shortages of key components could be an issue, Tsai said.

Inventec Corp president Jack Tsai, left, and chairman Sam Yeh gesture at a company event in Taipei on Jan. 20.

Photo: CNA

Inventec is a major assembly partner of Level 6 (L6) and full-system Level 10 (L10) servers for Dell Technologies Inc, HP Inc and Lenovo Group Ltd (聯想), with its products used mainly in data centers.

Servers accounted for 51 percent to 55 percent of Inventec’s revenue of NT$272.09 billion (US$8.28 billion) last quarter, followed by notebook computers at 46 percent to 50 percent and smart devices at 1 percent to 5 percent, company data showed.

GPU-based servers contribute a larger share of revenue within Inventec’s server portfolio, while ASIC-based models account for a larger share of its shipments, Inventec Enterprise Business Group president Vincent Lin (林書如) said.

Inventec would mainly ship L6 ASIC-based servers this year, with more L10 products slated for next year, Tsai said.

The company provides Nvidia Corp with rack- and cluster-level assembly for its Vera Rubin platform, as well as full-system and rack-level assembly for its HGX-based platforms, Lin said.

Its Advanced Micro Devices Inc (AMD) orders are focused mainly on L6 assembly, he said.

The share of rack-level server products has increased this year and is expected to rise significantly next year, he added.

Revenue from general-purpose servers is still expected to grow this year, supported by higher average selling prices amid rising component costs, Lin said.

Inventec’s notebook shipments and revenue are expected to remain flat or rebound slightly next year after shipments bottom out this year, while smart device shipments are expected to expand by a single-digit percentage next year, PC Business Group president Fermi Yin (尹福明) said.

The company yesterday reported third-quarter net profit of NT$2.54 billion, down 34.8 percent quarter-on-quarter and 7 percent year-on-year.

Earnings per share fell to NT$0.71 from NT$1.09 in the previous quarter and NT$0.76 a year earlier, it said.

Gross margin remained flat at 4.2 percent from the previous quarter but fell from 5 percent a year earlier.

Whether gross margin improves further this quarter would depend on product mix and component prices, Inventec chief financial officer Yu Chin-pao (游進寶) said.