Taiwan ODM： AI server timeframe re~calibrating adds uncertainties in 2H24； general servers and PCs in recovery； 2Q24 / July review

Investment Rating - The report assigns a "Buy" rating to several companies including ASUS, Quanta, and Gigabyte, while others like Compal and Pegatron are rated as "Neutral" [25]. Core Insights - The supply chain for AI servers is experiencing increased uncertainties regarding the launch timeline of new models, now expected to be late 2024 to early 2025, which may affect client order decisions [5][6]. - General servers are showing signs of recovery, with notable revenue increases reported by companies such as FIL and King Slide, indicating a positive trend in the sector [6][8]. - The report highlights a mixed outlook for PCs, with companies focused on commercial models expecting growth, while those with consumer model exposure anticipate a decline [6][8]. Summary by Sections AI Servers - The AI server market is facing uncertainties due to model revisions and delayed launches, impacting client order strategies [5][6]. - The expected launch of new AI server models has been pushed to late 2024 to early 2025, creating a cautious outlook for the second half of 2024 [5]. General Servers - Companies like FIL and King Slide reported significant year-over-year revenue growth of 16% and 92% respectively, indicating a recovery in general servers [6][8]. - The overall sentiment in the supply chain remains positive for growth in general servers during the second half of 2024 [6]. PCs - ODMs with a higher focus on commercial PCs are optimistic about a single-digit increase in global shipments for 2024, while those focused on consumer models expect flat to declining shipments [6][8]. - ASUS aims for a 15-20% quarter-over-quarter increase in PC shipments in Q3 2024, driven by Windows 11 and AI PCs [6]. Networking and Capacity Expansion - FII's networking revenues increased by 20% year-over-year in Q2 2024, surpassing expectations, driven by demand from CSP clients [7]. - Wistron announced a $214 million investment in capacity expansion for AI servers across multiple regions, reflecting positive trends in the AI server market [7]. Stock Recommendations - The report suggests that companies with a strong presence in general servers and commercial PCs, such as Hon Hai, FII, and Quanta, are likely to outperform during the upcoming product cycle [8].