LITE-ON boosts AI investment, eyes over 30% revenue contribution

LITE-ON Technology, a Taiwanese company, has increased its full-year capital expenditure to NT$18 billion, driven by a bullish outlook on the sustained growth of AI infrastructure demand. The company's General Manager, Chiu Sen-pin, stated that AI products are projected to account for more than 30% of revenue this year.

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The company is optimistic about the continued growth of AI infrastructure demand, and AI product revenue is expected to exceed 30% this year.

Several key products are slated for validation, mass production, and scaled deployment in the latter half of the year. These include the 110kW Power Shelf, Battery Backup Units (BBU), and 800V High Voltage Direct Current (HVDC) Power Racks. The 120kW CDU liquid cooling product began mass production in the second quarter, and rack-level cabinets have secured certifications and orders from North American cloud service providers (CSPs). LITE-ON aims to satisfy the AI data center market with a comprehensive product portfolio.

Chiu also noted the expansion of customer relationships, with two additional major North American CSPs commencing shipments. While current volumes are limited, the introduction of next-generation platforms is expected to increase market share. These new products are undergoing final validation (FVL) and are anticipated to be significant growth drivers. The 800V HVDC product will begin sample operation in August, with potential for small-scale production by November if validation proceeds smoothly, followed by larger-scale production in the first quarter of next year. The GPU platform is slated for introduction in the second quarter of next year.

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The new generation 110kW Power Shelf, BBU, and 800V HVDC Power Rack will gradually enter validation, mass production, and volume release phases in the second half.

The increased capital expenditure, up from an initial NT$13 billion, is primarily allocated to US factory construction, global capacity expansion, and the development and manufacturing equipment for high-power products. Facilities in Kaohsiung and Vietnam are expected to commence production in the third and fourth quarters, enhancing the company's ability to secure new orders. Chiu emphasized that this is a one-time upfront investment to support AI growth over the next five years, with further capacity expansion contingent on customer demand.

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The increased capital expenditure is mainly invested in high-power Power Rack R&D testing equipment and global capacity construction, which is a one-time upfront investment aimed at meeting the AI growth demand for the next five years.