CHEM Anticipates Record Highs and Sequential Quarterly Growth; Heavy Electric Sector Continues to Benefit from AI Applications

(Central News Agency, Reporter Chung Jung-feng, Taipei, 23rd) Heavy electrical equipment giant Chung-Hsin Electric & Machinery Mfg. Corp. (CHEM) CEO Guo Hui-juan estimated today that the company's operations have the potential to hit a new peak this year, with revenues projected to grow sequentially every quarter. Using the first quarter as a foundation, the heavy electric division and Gas Insulated Switchgear (GIS) products will continue to benefit from AI data centers and IDC applications, making significant growth highly anticipated.

CHEM was invited to an institutional investor conference hosted by a brokerage firm this afternoon. Looking ahead at the heavy electric business this year, Guo stated that the power division's momentum is driven not only by Taipower's grid resilience plan but also by continuous power source development, equipment replacement plans, and offshore wind projects. Furthermore, ongoing domestic and international plant expansions by the semiconductor industry, coupled with the construction of large AI data centers and Internet Data Centers (IDC) by global tech giants, continue to fuel the sales growth of high-voltage GIS products.

Regarding order volume, Guo pointed out that by March of this year, the heavy electric division had secured NT$6.3 billion in orders, bringing the total backlog to an impressive NT$43.1 billion.

On the expansion of the GIS business, Guo revealed that CHEM's GIS products have qualified as an approved supplier for a specific semiconductor fab, with the first contract expected to be signed in September and delivery scheduled for early 2027. Additionally, CHEM holds an approximate 80% market share in the Taipower system and about 65% in non-Taipower systems for its GIS business. The company plans to expand its sales workforce this year to further boost its market share.

In terms of export markets, Guo mentioned that CHEM is persistently developing the Japanese market and continues preparations to enter the US market. The company has already made inroads into India and Vietnam; in India, it is partnering with local transformer manufacturers, while in Vietnam, it cooperates with local distributors to supply products, utilizing its production capacity in mainland China to meet the demand in these regions.

For the parking management division, Guo noted an aggressive push into the smart parking equipment markets in Thailand and Japan this year, estimating a profit boost by the third quarter.

In the air conditioning and generator segments, Guo highlighted that due to telecom operators and international tech giants setting up IDCs and AI research centers in Taiwan, revenue is expected to grow by 15% this year.

Regarding new business opportunities, Guo stated that CHEM possesses the capability to integrate power generation systems with air conditioning. The company is currently negotiating with interested parties for modular data center partnerships and continuously assessing potential business benefits. Industry analysts suggest that the deployment of these modular data centers could be applied to the AI server assembly sector.

As for the hydrogen energy business, Guo pointed out that the company has secured hydrogen bus contracts. However, impacted by supply chain delivery variations and factors like conflicts in the Middle East, operations in this segment are expected to become clearer in the second half of the year. CHEM is also continuing to develop containerized hydrogen energy systems and fuel cell-based energy storage systems.

Looking at the capital expenditure scale for this year, CHEM estimates it to be between NT$1.5 billion and NT$2 billion, primarily for expanding new businesses and the private sector market, pursuing business opportunities through equity exchange partnerships, and seeking agency opportunities for biomass energy equipment.

On the adoption of AI applications internally, Guo mentioned that CHEM continues to implement AI systems and equipment, estimating a 15% to 20% boost in production capacity.

According to the data, in the first quarter of this year, green energy (heavy electrical equipment, engineering, hydrogen energy, energy storage, solar photovoltaics, microgrids, etc.) accounted for about 64% of CHEM's revenue, while services (Dudufang parking, O&M management, etc.) made up 21%, and engineering and others (urban renewal, precision machining, fire protection and plumbing systems integration, etc.) accounted for about 15%. CHEM explained that while first-quarter solar photovoltaic revenue was relatively sluggish, the heavy electric business continued to grow. (Editor: Yang Lan-hsuan) 1150423