Taiwanese Component Maker Kai Mei Raises Prices, Eyes Profit Growth

Taiwanese passive component manufacturer Kai Mei (2375) is implementing price increases across various customer segments and product lines, with adjustments taking effect in July and August 2026. The company anticipates these measures will boost its gross profit margin in the third quarter, contributing to improved overall profitability.

Company spokesperson Li Yen-ru stated that the price hikes are a response to rising raw material costs, particularly for resistors. These adjustments aim to increase the average selling price (ASP) and offset the impact of increased material expenses. The company currently holds an order-to-shipment ratio of 1.2, indicating robust demand and a healthy order backlog.

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The price adjustments will help increase ASP (average selling price) and partially offset the impact of rising raw material costs, improving overall profitability.

Kai Mei is optimistic about its third-quarter outlook, driven by strong customer demand and a trend of early inventory stocking due to concerns about material availability and future pricing. The company's main product lines are currently experiencing a BB Ratio exceeding 1.2, reflecting stronger order intake than shipments.

Looking ahead, Kai Mei sees significant growth opportunities in the artificial intelligence (AI) sector. While its primary products are resistors, the company is involved in supplying components for AI servers, including the GB200, which is slated for mass production in the latter half of 2025. Kai Mei projects that its AI-related business revenue could see exponential growth this year, positioning AI servers as a key growth driver for its resistor division.

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AI servers have become a very important growth driver for Kai Mei's resistor business, and related product revenue is expected to maintain exponential growth this year.