Wan Tai Scientific Expects Gradual Quarterly Improvement in Operations, Focused on AI and Satellite Applications

Wan Tai Scientific reported a net profit attributable to owners of the parent of NT$79.23 million in the first quarter of 2024, a 20.5% decrease from the previous quarter and a 31.8% decline year-on-year, resulting in a 'double decline' in both annual and quarterly terms. Earnings per share stood at NT$0.43. The company stated that Q1 represents the annual low point and expects operations to gradually improve on a sequential basis through 2026.

The wire manufacturer held an earnings call today, attributing the Q1 profit decline to rising raw material costs and shifts in product mix. It remains optimistic, forecasting sequential growth in both revenue and profitability for the year. Notably, high-margin products such as AI high-speed cables and satellite cables are seeing sustained shipment growth. The company reaffirmed its five-year revenue CAGR target of 25% and a long-term gross margin goal of 20%.

Management noted that beyond traditional high-speed cables, the company is advancing customer validation for high-end applications such as high-current power cables and water leakage detection cables for AI servers, with mass shipments expected by the end of the year. Copper wire applications are also expanding into physical AI domains, targeting emerging opportunities in robotics and drones.

Additionally, low Earth orbit (LEO) satellites have become another major growth engine. Shipments for existing products to U.S.-based satellite customers continue to rise, and Wan Tai is actively developing two new harness products. Satellite-related revenue is expected to double its share of total revenue compared to last year. Beyond AC power and network cables for ground receivers entering mass production with new clients, the company is also developing extreme cooling cable solutions for space data centers.

To meet substantial order demand, Wan Tai plans to invest approximately NT$300–400 million in capital expenditures by 2026. About NT$250 million will be allocated to the third-phase expansion of high-speed cable production at its Thailand plant to meet in-tray AI server cable demand. Upon completion, monthly production capacity will reach 8 to 10 million meters.

Furthermore, in response to rising demand from electric vehicles and upgraded home appliances, the company has completed expansion of its electron beam (E-Beam) cross-linked wire production at its Vietnam facility, which entered trial mass production in early 2024.