Phihong Focuses on AI Peripherals and LEO Satellites, Aims for 40% Revenue Share from Networking Products

(CNA, by reporter Tseng Jen-kai, Taipei, 9th) Power supply manufacturer Phihong held an investor conference today, where General Manager Lin Kuan-hung stated that customers for non-AI products like mobile phones and machine tools have recently faced growth impediments due to shortages of materials such as memory. This year, Phihong will focus on networking products for AI data center peripherals, estimating that the revenue share from networking products will increase significantly from 27% last year to 40%, driving gross margin growth.

Phihong's first-quarter revenue was NT$2.095 billion, a decrease of 10.9% quarter-on-quarter and 7.2% year-on-year. Net loss attributable to the parent company was NT$145 million, marking the second consecutive quarter of losses, with a net loss per share of NT$0.35. However, Phihong's Q1 gross margin was 21.1%, an increase of 2.1 percentage points from the same period last year. Lin Kuan-hung is optimistic that the gross margin will be even better in the second quarter.

Lin pointed out that the improvement in gross margin reflects the results of Phihong's 'Transformation 2.0' in recent years. Phihong is gradually moving from traditional low-power supplies to high-power supplies of 500W, 1000W, and above. In the past, mobile phone products accounted for over 60% of Phihong's revenue; this has now dropped to 20% and is estimated to further decrease to 12% this year.

Lin stated that it's evident from the stock market that capital is currently shifting towards high-value, high-growth projects like AI and low-earth orbit (LEO) satellites. From Phihong's perspective, customers for non-AI products, including mobile phones and machine tools, are all affected by the crowding-out effect and shortages of various materials like memory, hindering operational growth this year.

Phihong is also transforming accordingly. It has entered the supply chain of three North American LEO satellite customers and is one of the main suppliers for all of them, primarily providing power for ground receivers. In the future, the company hopes to expand into higher-power supplies for gateways.

Regarding AI, Lin admitted that the power supply market for AI cloud data centers is currently dominated by manufacturers like Delta Electronics and Lite-On Technology. Phihong will pragmatically focus on developing power supplies for networking products that are peripheral to AI data centers. This segment is also Phihong's main growth driver for this year, with the revenue share from networking products estimated to increase substantially from 27% last year to 40%.

Referring to the recently concluded Computex Taipei, where NVIDIA CEO Jensen Huang unveiled the new RTX Spark AI computers, Lin believes this symbolizes that AI is gradually moving from the cloud to the edge, which will bring many new opportunities for Phihong. (Editor: Chang Liang-chih) 1150609