Rongcheng Electric: Military-Industrial Revenue to Reach 50% This Year, Plans Thailand Factory Investment
Industrial computer manufacturer Rongcheng Electric announced at an investor conference that its military-industrial business is projected to exceed 50% of total revenue this year, driven by increased global defense budgets. The company plans to invest in a factory in Thailand to produce low-end, high-volume products. Rongcheng Electric also reported record-high consolidated revenues for March (NT$352 million, +13.7% YoY) and Q1 (NT$947 million, +18.2% YoY). The company aims to enter the low-earth orbit satellite application market through a joint venture. Despite an anticipated Q1 gross margin dip to 37% due to memory price hikes, it expects a rebound from Q2, targeting a full-year gross margin of 39.85%.
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- 📰 Published: April 13, 2026 at 19:26
- 🔍 Collected: April 13, 2026 at 19:31 (5 min after Published)
- 🤖 AI Analyzed: April 13, 2026 at 21:13 (1h 41m after Collected)
Industrial computer manufacturer Rongcheng Electric held an investor conference today. Chairman Lu Gu-qing stated that with increasing global defense budgets, Rongcheng Electric's military-industrial related business is estimated to exceed 50% of total revenue this year, becoming the main source of revenue growth. The company plans to invest in a factory in Thailand this year, and in the future, low-end, high-volume products will be moved to Thailand for production.
Rongcheng Electric's consolidated revenue for March was approximately NT$352 million, a month-on-month increase of 21.1% and a year-on-year increase of 13.7%, setting a new record for the same period. Consolidated revenue for Q1 this year was approximately NT$947 million, a year-on-year increase of 18.2%, also setting a new record for the same period.
Lu Gu-qing pointed out that benefiting from increased defense budgets in the United States, Europe, India, and the Middle East, military-industrial defense will be Rongcheng Electric's strongest growth business this year, with a growth rate starting at least 50%.
He said that Rongcheng Electric also plans to enter low-earth orbit satellite applications and will establish a joint venture factory with related companies to add new momentum to operations.
Regarding memory price increases, Lu Gu-qing stated that the company actively stocked up on materials in the second half of last year. The current inventory level has increased by 40% to 50% compared to September last year, and 80% of the components for this year's orders are already prepared.
Affected by memory shortages and price increases, Rongcheng Electric expects its Q1 gross margin to decline to 37%. With medical and military-industrial defense products becoming the focus of growth this year, and after price negotiations with customers, Rongcheng Electric expects gross margin to rebound from Q2, maintaining the full-year 2026 gross margin target at last year's level of 39.85%.
Rongcheng Electric's consolidated revenue for March was approximately NT$352 million, a month-on-month increase of 21.1% and a year-on-year increase of 13.7%, setting a new record for the same period. Consolidated revenue for Q1 this year was approximately NT$947 million, a year-on-year increase of 18.2%, also setting a new record for the same period.
Lu Gu-qing pointed out that benefiting from increased defense budgets in the United States, Europe, India, and the Middle East, military-industrial defense will be Rongcheng Electric's strongest growth business this year, with a growth rate starting at least 50%.
He said that Rongcheng Electric also plans to enter low-earth orbit satellite applications and will establish a joint venture factory with related companies to add new momentum to operations.
Regarding memory price increases, Lu Gu-qing stated that the company actively stocked up on materials in the second half of last year. The current inventory level has increased by 40% to 50% compared to September last year, and 80% of the components for this year's orders are already prepared.
Affected by memory shortages and price increases, Rongcheng Electric expects its Q1 gross margin to decline to 37%. With medical and military-industrial defense products becoming the focus of growth this year, and after price negotiations with customers, Rongcheng Electric expects gross margin to rebound from Q2, maintaining the full-year 2026 gross margin target at last year's level of 39.85%.