ASUS: AI Demand Explodes, Server Revenue Target Revised Up to At Least Double This Year

(Central News Agency reporter Wu Chia-hao, Taipei, 12th) Computer brand manufacturer ASUS held an investor conference today, where its management team stated that benefiting from the explosive demand for artificial intelligence (AI) infrastructure and the strength of its gaming brand, overall revenue in the second quarter of this year will continue to grow. Due to strong demand from server customers and high order visibility, the full-year server revenue growth target has been revised upwards from the original 50% to 100% year-on-year increase to at least double.

ASUS's brand consolidated revenue in the first quarter of this year reached NT$194.051 billion, a 2% increase quarter-on-quarter and a 44% increase year-on-year, setting a new quarterly record. Operating profit was NT$10.502 billion, a 30% increase quarter-on-quarter but an 8% decrease year-on-year, mainly because last year's same period saw a significant increase in operating profit due to the reversal of server bad debts. Affected by a decline in non-operating income, net profit attributable to the parent company was approximately NT$9.797 billion, a 14% decrease quarter-on-quarter and a 23% decrease year-on-year; earnings per share were NT$13.2.

Looking ahead to Q2 operations, ASUS expects PC product revenue to increase by 10% to 15% quarter-on-quarter and 10% to 15% year-on-year; component products are expected to be flat with Q1 and decrease by 10% year-on-year; servers, however, will show strong growth momentum, expected to increase by 50% quarter-on-quarter and double year-on-year.

Regarding the server business outlook, ASUS Co-CEO S.Y. Hsu stated that with the global AI infrastructure entering an explosive growth period, ASUS servers have already achieved high growth in Q1. Based on the visibility of orders for Q2 and the second half of the year, and strong demand from emerging cloud service providers (Neo Cloud) customers, ASUS has revised its full-year server growth target from the original 50% to 100% to at least 100% growth.

Hsu also stated that ASUS has confirmed it will maintain first-tier shipments for NVIDIA's next-generation Vera Rubin AI server architecture platform.

In terms of PC market strategy, ASUS Co-CEO Samson Hu pointed out that research institutions estimate global PC shipments this year may decline by 10% to 15%. ASUS's internal goal is to outperform the industry average, with full-year shipments expected to remain flat; however, due to an increase in average selling price (ASP), full-year PC-related revenue is still expected to grow significantly.

Hu added that memory prices almost doubled in Q1 this year. ASUS negotiated a memorandum of cooperation with major upstream manufacturers in the second half of last year to ensure supply. Although suppliers cannot provide excess inventory due to capacity limitations, ASUS currently has sufficient inventory to meet business growth needs and will transform cost fluctuations into operational resilience through an excellent product portfolio and brand premium.

Regarding Apple's launch of the affordable MacBook Neo laptop, Hu stated that ASUS had been aware of related news since last year and had originally planned corresponding products to compete. However, due to the sharp increase in memory prices in Q1 this year, the price range of the originally planned corresponding products shifted.

Hu admitted that Apple has an advantage in volume and signed long-term supply contracts before memory prices rose, giving it a cost advantage. ASUS is currently discussing countermeasures with upstream and downstream partners in the industry and will provide an external explanation once a final decision is made. (Editor: Lin Chia-hsien) 1150512

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