Quanta's Q1 EPS Hits Record High of NT$5.5
Contract manufacturer Quanta held an earnings call today, announcing its first-quarter financial results. Benefiting from strong demand for artificial intelligence (AI) servers, revenue hit a new single-quarter high. However, changes in the server product mix affected gross margin. Net profit attributable to the parent company was approximately NT$21.192 billion, a decrease of 4.5% quarterly but an increase of 8.7% annually. Earnings per share (EPS) of NT$5.5 set a new record high for the same period.
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- 📰 Published: May 14, 2026 at 18:27
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(Central News Agency, Taipei, 14th) - Contract manufacturer Quanta held an earnings call today, announcing its first-quarter financial results. Benefiting from strong demand for artificial intelligence (AI) servers, revenue hit a new single-quarter high, but changes in the server product mix affected gross margin. Net profit attributable to the parent company was approximately NT$21.192 billion, a decrease of 4.5% quarterly but an increase of 8.7% annually, with earnings per share of NT$5.5 being a record high for the same period.
Quanta's capital expenditure in the first quarter of this year reached NT$8.1 billion, mainly for AI capacity expansion in its US and Thailand facilities. The company maintains its goal of doubling its overall AI production capacity by the end of 2026 compared to 2025, with estimated total capital expenditure for 2026 reaching NT$30 billion. AI order visibility already extends beyond 2027.
To strengthen its US manufacturing capacity and service system, Quanta's board of directors today approved a total capital increase of US$800 million (approximately NT$25.2 billion) for three overseas subsidiaries, to be invested in stages according to actual needs.
Quanta's CFO, Yang Chun-lieh, stated that customers' view of data centers has shifted from a "cost center" to a "profit center," driving strong investment in AI infrastructure. Quanta's most important mission currently is to cooperate with customers to jointly solve capacity and power needs, which is also reflected in Quanta's continued increase in capital expenditure in the United States.
Quanta's consolidated revenue for the first quarter of this year was NT$809.221 billion, a quarterly increase of 26.7% and an annual increase of 66.6%, a record high for a single quarter. The main growth drivers were the strong growth in the server and notebook computer businesses. Notebook shipments in the first quarter were about 10 million units, a quarterly decrease of 8.3% and an annual decrease of 7.4%, a decline of less than 10%, mainly due to customers actively pulling in inventory for new model launches.
Quanta's gross margin in the first quarter was 4.78%, a quarterly decrease of 1.55 percentage points and an annual decrease of 3.14 percentage points. This was mainly due to changes in the product mix and the rise in electronic component prices, including memory. Two-thirds of the impact came from changes in the server product mix, and one-third from changes in the notebook product mix and one-time AI server trial production costs.
Quanta's AI servers contributed over 75% of the total server revenue in the first quarter, but there was also a significant transition in the specifications of AI server shipments, accelerating the iteration towards the latest generation of graphics processing units (GPUs), with shipments concentrated in higher-density racks with more powerful computing capabilities. The number of racks with a unit price higher than US$3 million (approximately NT$94.5 million) in the first quarter of this year doubled compared to the fourth quarter of last year. GB300 shipments have already surpassed GB200, while older-generation low-density racks are rapidly being phased out.
Quanta stated that the dilutive effect on gross margin caused by the AI shipment structure is expected to ease in the second quarter as product unit prices increase significantly.
The strong demand for AI servers also boosted the performance of general-purpose servers. Quanta's AI server revenue grew by 30% quarterly in the first quarter, and is expected to maintain double-digit quarterly growth in the second quarter. General-purpose server revenue is also expected to continue to grow quarterly. Quanta has therefore raised its full-year outlook for general-purpose servers from the original estimate of being flat with last year to double-digit annual growth.
For AI servers, Quanta maintains its view of triple-digit annual revenue growth for the full year. The growth momentum in the first quarter of this year has strengthened this confidence, and orders from emerging cloud providers (Neo Cloud) will also begin to ship in the second half of the year.
Quanta said that as AI servers evolve towards higher computing power, high-unit-price racks are driving high revenue growth but also diluting gross margins. Quanta continues to negotiate with customers to switch transaction models from Buy and Sell (buying raw materials for production and then selling the finished products back to the brand) to Consignment (the brand procures materials itself, and the contract manufacturer is only responsible for receiving and assembling them). This will alleviate pressure on working capital and gross margins, and a small number of projects will begin to adopt the consignment model in the second half of this year.
In terms of notebooks, Quanta said that due to the high base in the first quarter of this year and the continued tight supply of key components, notebook shipments in the second quarter are expected to be flat or show slight quarterly growth. The full-year outlook will be in line with the industry average, mainly because the memory supply shortage is driving up costs and end-user prices, weakening consumer purchasing intentions, and causing customers' product planning to become more conservative.
In the automotive business, Quanta's smart driving and electric vehicle-related products have shown signs of bottoming out and recovering in the first quarter, with double-digit annual growth. (Editor: Zhai Sijia) 1150514
Quanta's capital expenditure in the first quarter of this year reached NT$8.1 billion, mainly for AI capacity expansion in its US and Thailand facilities. The company maintains its goal of doubling its overall AI production capacity by the end of 2026 compared to 2025, with estimated total capital expenditure for 2026 reaching NT$30 billion. AI order visibility already extends beyond 2027.
To strengthen its US manufacturing capacity and service system, Quanta's board of directors today approved a total capital increase of US$800 million (approximately NT$25.2 billion) for three overseas subsidiaries, to be invested in stages according to actual needs.
Quanta's CFO, Yang Chun-lieh, stated that customers' view of data centers has shifted from a "cost center" to a "profit center," driving strong investment in AI infrastructure. Quanta's most important mission currently is to cooperate with customers to jointly solve capacity and power needs, which is also reflected in Quanta's continued increase in capital expenditure in the United States.
Quanta's consolidated revenue for the first quarter of this year was NT$809.221 billion, a quarterly increase of 26.7% and an annual increase of 66.6%, a record high for a single quarter. The main growth drivers were the strong growth in the server and notebook computer businesses. Notebook shipments in the first quarter were about 10 million units, a quarterly decrease of 8.3% and an annual decrease of 7.4%, a decline of less than 10%, mainly due to customers actively pulling in inventory for new model launches.
Quanta's gross margin in the first quarter was 4.78%, a quarterly decrease of 1.55 percentage points and an annual decrease of 3.14 percentage points. This was mainly due to changes in the product mix and the rise in electronic component prices, including memory. Two-thirds of the impact came from changes in the server product mix, and one-third from changes in the notebook product mix and one-time AI server trial production costs.
Quanta's AI servers contributed over 75% of the total server revenue in the first quarter, but there was also a significant transition in the specifications of AI server shipments, accelerating the iteration towards the latest generation of graphics processing units (GPUs), with shipments concentrated in higher-density racks with more powerful computing capabilities. The number of racks with a unit price higher than US$3 million (approximately NT$94.5 million) in the first quarter of this year doubled compared to the fourth quarter of last year. GB300 shipments have already surpassed GB200, while older-generation low-density racks are rapidly being phased out.
Quanta stated that the dilutive effect on gross margin caused by the AI shipment structure is expected to ease in the second quarter as product unit prices increase significantly.
The strong demand for AI servers also boosted the performance of general-purpose servers. Quanta's AI server revenue grew by 30% quarterly in the first quarter, and is expected to maintain double-digit quarterly growth in the second quarter. General-purpose server revenue is also expected to continue to grow quarterly. Quanta has therefore raised its full-year outlook for general-purpose servers from the original estimate of being flat with last year to double-digit annual growth.
For AI servers, Quanta maintains its view of triple-digit annual revenue growth for the full year. The growth momentum in the first quarter of this year has strengthened this confidence, and orders from emerging cloud providers (Neo Cloud) will also begin to ship in the second half of the year.
Quanta said that as AI servers evolve towards higher computing power, high-unit-price racks are driving high revenue growth but also diluting gross margins. Quanta continues to negotiate with customers to switch transaction models from Buy and Sell (buying raw materials for production and then selling the finished products back to the brand) to Consignment (the brand procures materials itself, and the contract manufacturer is only responsible for receiving and assembling them). This will alleviate pressure on working capital and gross margins, and a small number of projects will begin to adopt the consignment model in the second half of this year.
In terms of notebooks, Quanta said that due to the high base in the first quarter of this year and the continued tight supply of key components, notebook shipments in the second quarter are expected to be flat or show slight quarterly growth. The full-year outlook will be in line with the industry average, mainly because the memory supply shortage is driving up costs and end-user prices, weakening consumer purchasing intentions, and causing customers' product planning to become more conservative.
In the automotive business, Quanta's smart driving and electric vehicle-related products have shown signs of bottoming out and recovering in the first quarter, with double-digit annual growth. (Editor: Zhai Sijia) 1150514