Cheng Uei's June Revenue Hits Record High, Stock Surges on AI Demand

Taiwanese graphics card supplier Cheng Uei (2425) achieved a historic milestone, reporting record-high monthly revenue of NT$2.408 billion (approximately $74 million) in June. This figure represents a 35.5% increase from the previous month and a staggering 376.5% surge compared to June of the previous year. Fueled by strong buying interest, the company's stock opened at its upper limit this morning, trading at NT$44.05 by 9:27 AM.

For the first six months of the year, Cheng Uei's cumulative revenue reached NT$8.98 billion (approximately $276 million), an increase of 116.51% year-on-year, also marking a new historical record. Management attributes this growth to a confluence of factors, including a price increase cycle across PCs, memory, and graphics cards since early this year. This trend is primarily driven by robust demand for High Bandwidth Memory (HBM) and next-generation DRAM and NAND from AI data centers, which has constrained capacity for traditional applications and pushed up memory prices.

Graphics cards, with their high memory cost structure, were among the first to reflect these increased costs, leading to higher end-user prices. Cheng Uei emphasizes that this price increase is not a short-term phenomenon but a structural repricing driven by AI demand. Graphics cards are transitioning from consumer products to a crucial component of the AI capital cycle, with rising average selling prices enhancing revenue and overall industry value.

Furthermore, the AI features integrated into Microsoft's Windows 11 are stimulating a new wave of PC hardware upgrades and the widespread adoption of AI PCs, providing significant demand support for the board and card market this year. Looking ahead, Cheng Uei plans to continue diversifying its supply sources and deepening long-term partnerships with key suppliers to ensure stable raw material supply and enhance production flexibility. The company will also focus on strengthening R&D capabilities and product quality management to precisely meet market and customer needs, thereby boosting its overall competitive advantage.