Summary of J.P. Morgan's PC and Server Market Analysis Industry Overview - The analysis focuses on the **PC and server markets**, highlighting trends and forecasts for shipments and demand in the coming years. Key Points on PC Market - **Shipment Growth Forecasts**: - Adjusted global PC shipment growth forecast for 2025 is **+8%**, while a decline of **-9%** is expected in 2026 [1] - **Demand Trends**: - Anticipated downside in PC unit demand due to **memory-driven product price hikes** [1][4] - A significant **20%+ increase** in product prices has been noted recently, impacting consumer PC demand [4] - Forecasts indicate **10%** decline in consumer PC shipments and **7%** decline in commercial PC shipments for 2026 [11] - **Commercial PC Demand**: - Muted refresh demand is expected this year, with a potential pause in demand from **2Q26** onwards [1][11] - **Competition**: - Increased competition in mainstream PCs due to new model launches from major players like **Dell** and **Apple** [4] Key Points on Server Market - **General Server Demand**: - Strong demand from **US Cloud Service Providers (CSPs)** is expected to continue into 2026, particularly for storage servers driven by AI inference activities [4] - Forecasted **30%+ growth** in CSP server shipments, offset by a single-digit decline in enterprise server demand [11] - **AI Server Growth**: - Notable ramp-up in **GB300 server shipments** is expected, with estimates of **50-70k NVL72 rack shipments** this year, driven by strong AI server demand [4] - Anticipated growth in **ASIC server demand**, particularly for TPU servers [4] - **Overall Server Shipment Growth**: - Total server shipment growth forecast for 2026 is **14.6%**, up from previous estimates of **+4.6%** [11] Key Companies Mentioned - **Positive Outlook**: - Companies such as **Wiwynn**, **Hon Hai**, and **Quanta** are favored in the server ODM space [1] - For server components, **ASPEED**, **Delta**, **Jentech**, and **Lotes** are highlighted [1] - **Cautious Outlook**: - Companies like **ASUSTek**, **Micro-Star**, and **Compal** are viewed with caution due to expected challenges in the PC segment [1] Additional Insights - **Memory Component Costs**: - A significant increase in memory component costs is expected, leading to at least **double YoY memory costs** in the upcoming quarters [4] - **Market Dynamics**: - The report indicates a prolonged supercycle in general servers driven by AI demand, with potential risks from component supply constraints [4] This summary encapsulates the critical insights from the J.P. Morgan analysis on the PC and server markets, providing a comprehensive overview of expected trends, challenges, and opportunities within the industry.

Core Insights - Compal Electronics is set to unveil its next-generation AI and HPC servers at Supercomputing 2025, focusing on advancements in data-center architecture driven by generative AI and HPC workloads [1][2][10] - The company emphasizes a shift from compute-centric to data-centric architectures, integrating Storage-as-Memory to enhance data flow across storage, memory, and compute layers [7][8] Product Highlights - The SGX30-2 AI server, built on NVIDIA HGX B300, supports up to eight NVIDIA Blackwell Ultra GPUs and dual Intel Xeon 6 processors, designed for large-scale AI model training and HPC workloads [2][3] - The SX420-2A server features a high-density design supporting up to eight NVIDIA RTX PRO 6000 Blackwell GPUs, enhancing performance for various enterprise workloads [3][4] Technological Innovations - Compal's next-generation architectures focus on memory expansion and data-flow optimization, utilizing PCIe interfaces and intelligent DMA offload for improved data access speeds [4][5] - The integration of advanced thermal management solutions, including air, liquid, and immersion cooling technologies, aims to maintain optimal energy efficiency under high power density [6][10] Strategic Vision - Compal is committed to advancing energy-efficient infrastructure through system integration and heterogeneous computing technologies, positioning itself as a leader in the evolving data-center landscape [8][10]

Core Insights - Global data centers are facing challenges due to increased AI compute demand, larger working sets, and stricter energy efficiency requirements [1] - Compal Electronics presented a vision for future data centers, offering end-to-end solutions encompassing compute, memory, and cooling at the OCP Global Summit [1][2] Compute Solutions - Compal showcased its latest AI server, SGX30-2 / 10U, built on the NVIDIA HGX B300 platform, featuring eight NVIDIA Blackwell Ultra GPUs and dual Intel® Xeon® 6 processors [2] - The NVIDIA Blackwell Ultra GPUs provide up to 2.1 TB of HBM3e memory and 1.8 TB/s GPU-to-GPU NVLink bandwidth, achieving a total interconnect bandwidth of 14.4 TB/s [3] - The system delivers 144 PFLOPS of FP4 inference performance and approximately 72 PFLOPS of FP8 performance, marking a 7x increase in compute performance compared to the previous generation [3] Memory Expansion Technologies - Compal introduced CXL and RDMA technologies for AI Memory Expansion, addressing memory bottlenecks in large language model training and HPC [4] - The CXL.mem protocol allows servers to access pooled SCM-based Memory Expanders, enabling efficient processing of larger datasets beyond HBM limits [4] - RDMA facilitates direct data movement across servers and data centers, supporting large-scale memory disaggregation and resource pooling [6] Infrastructure Evolution - The integration of intelligent DMA and low-latency data-path design transforms NVMe storage into a memory-like extension, enhancing data access speed without increasing CPU overhead [5] - Compal's technologies aim to create a unified, energy-efficient infrastructure that evolves from current PCIe-based systems to next-generation GPU direct storage and CXL-enabled architectures [6] - Compal positions itself as a system integrator and strategic partner for enterprises in their digital transformation journey [7] Company Background - Founded in 1984, Compal is a leading manufacturer in the notebook and smart device industry, recognized for its innovative product designs [8] - In 2025, Compal was listed among Taiwan's top 7 manufacturers and consistently ranks among the Forbes Global 2000 companies [8] - The company is actively developing emerging businesses, including cloud servers and smart medical solutions, leveraging its integrated R&D and manufacturing capabilities [8]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Greater China Technology Hardware, specifically in the context of AI Data Centers [1][3] - **Market Outlook**: The industry view is rated as "In-Line" by Morgan Stanley, indicating expected performance in line with the broader market [3][61] Core Insights - **Data Center Infrastructure Growth**: The Data Center Power and Cooling Infrastructure is projected to grow at a CAGR of 30% from 2026 to 2030 [6][8] - **Comparative Analysis of Companies**: - **Delta Electronics vs. Vertiv**: - Delta's market cap is approximately $75.461 billion, with a projected revenue of $16.341 billion for 2025, and a revenue CAGR of 23% from 2024 to 2027 [11] - Vertiv's market cap is around $53.374 billion, with a projected revenue of $10.024 billion for 2025, and a revenue CAGR of 19% from 2024 to 2027 [11] - Delta has a 40% exposure to data centers, while Vertiv has an 80% exposure [11] - Delta's operating margin is estimated at 14%, compared to Vertiv's 20% [11] - Delta's net profit for 2025 is projected at $1.709 billion, with a net profit CAGR of 40% from 2024 to 2027 [11] - Delta's return on equity (ROE) is estimated at 18%, while Vertiv's is significantly higher at 40% [11] Additional Insights - **Revenue Contribution from Services**: Vertiv differentiates itself with over 20% of its revenue coming from services, while Delta has a more diverse end-market exposure [14][12] - **Geographic Exposure**: Delta has a more balanced geographic exposure compared to Vertiv, which is heavily weighted towards the Americas [19][12] - **Dell's AI Contribution**: Dell's AI server contribution to Compal is estimated to be between 1-1.5% of its EPS for 2026, indicating a modest impact [30] Industry Drivers - **Semiconductor Production Equipment**: - Collaboration between Lam Research and JSR on EUVL resists is expected to impact the market significantly, with potential market shrinkage of over ¥30 billion in 2026 for coater/developer equipment [28] - **Investment Themes**: Advanced packaging, high bandwidth memory, and other emerging technologies are highlighted as key investment themes in the semiconductor space [27] Conclusion - The Greater China Technology Hardware sector, particularly in AI Data Centers, shows promising growth potential, with significant opportunities in power and cooling infrastructure. Companies like Delta and Vertiv are positioned differently within the market, with varying exposure and growth trajectories. The semiconductor production equipment sector is also evolving with new collaborations that could reshape market dynamics.

Core Insights - Compal Electronics has launched its new high-performance server platform SG720-2A/OG720-2A, designed for generative AI and large language model training, featuring AMD Instinct™ MI355X GPU architecture and advanced liquid cooling options [1][3][6] Technical Highlights - The SG720-2A/OG720-2A supports up to eight AMD Instinct MI350 Series GPUs, enabling scalable training for LLMs and generative AI applications [7] - It incorporates a dual cooling architecture, including air and two-phase liquid cooling, optimized for high thermal density workloads, enhancing thermal efficiency [7] - The server is built on the CDNA 4 architecture with 288GB HBM3E memory and 8TB/s bandwidth, supporting FP6 and FP4 data formats, tailored for AI and HPC applications [7] - High-speed interconnect performance is achieved through PCIe Gen5 and AMD Infinity Fabric™, facilitating multi-GPU orchestration and reducing latency [7] - The platform is compatible with mainstream open-source AI stacks like ROCm™, PyTorch, and TensorFlow, streamlining AI model integration [7] - It supports EIA 19" and ORv3 21" rack standards with a modular design for easy upgrades and maintenance [7] Strategic Collaboration - Compal has a long-standing collaboration with AMD, co-developing solutions that enhance efficiency and sustainability in data center operations [5] - The launch of SG720-2A/OG720-2A at both Advancing AI 2025 and ISC 2025 highlights Compal's commitment to expanding its global visibility and partnerships in the AI and HPC sectors [7]

Core Insights - Cirrus Logic Inc. (CRUS) has partnered with Compal Electronics to develop AI-powered audio technology aimed at improving sound performance in laptops without sacrificing clarity or quality [1][3][4] - The partnership will showcase prototype demonstrations at Computex 2025, indicating a focus on next-generation laptop audio solutions [2] Group 1: Industry Challenge - Despite advancements in technology, audio quality in modern laptops remains inadequate, particularly at high volumes, leading to mechanical vibrations and audio distortion [3] - The compact design of laptops exacerbates these audio issues, affecting user experience [3] Group 2: Technological Innovation - Cirrus Logic is leveraging AI to address audio challenges, utilizing proprietary tools and rattle limiter algorithms to detect and reduce mechanical rattle [4] - This technology allows laptops to produce louder and clearer sound without physical compromises [4] Group 3: Manufacturing Integration - Compal will integrate this AI audio technology into its laptop production lines, enhancing quality assurance and consistency across production batches [5] - The integration aims to reduce defective units and improve overall user experience [5] Group 4: Benefits to the PC Ecosystem - OEMs can offer high-quality audio without compromising loudness and clarity, potentially reducing customer returns related to sound issues [7] - ODMs like Compal will benefit from simplified quality testing and more consistent audio performance across production batches [8] - End users will experience improved audio quality with louder sound and deeper bass, free from distracting rattles [8] Group 5: Company Growth and Innovation - Cirrus Logic has a strong history of innovation in audio processing, with its Rattle Limiter technology already mitigating distortion in various applications [9] - The company is focused on expanding its market presence in consumer electronics, with recent product launches enhancing audio performance for mobile devices [10] - Cirrus Logic anticipates steady revenue generation from its innovations, allowing R&D to explore new growth areas [11]

Core Insights - Compal Electronics unveiled three new server platforms at GTC 2025, designed for enterprise-level AI, HPC, and high-load computing applications, built on NVIDIA MGX architecture [1][2][4] Product Overview - The SX420-2A and SX224-2A servers are powered by the NVIDIA RTX PRO™ 6000 Blackwell GPU, featuring 96GB of GDDR7 memory and a passively cooled thermal design, ensuring stable operation under extreme loads [3][7] - The SX220-1N server is designed for large-scale AI and HPC applications, utilizing the NVIDIA GH200 Grace Hopper™ Superchip and NVLink-C2C technology for enhanced memory speeds and bandwidth [4][7] Competitive Positioning - The new server platforms are positioned as highly competitive solutions in the industry, catering to the rigorous requirements of diverse data center applications [3][4] - Compal's innovative designs and technology advancements are expected to herald a new era in enterprise computing technology [4] Company Background - Founded in 1984, Compal is a leading manufacturer in the notebook and smart device industry, recognized as one of Taiwan's top manufacturers and consistently ranked among the Forbes Global 2000 and Fortune Global 500 companies [5]

Core Insights - Compal Electronics will showcase its latest AI-HPC GPU server solutions at NVIDIA GTC 2025, scheduled for March 18, 2025, in San Jose, California [1][2] Group 1: Product Innovations - Compal will unveil several high-performance GPU servers aimed at optimizing AI training and accelerating data center operations, including servers based on the NVIDIA MGX architecture [3] - The company has begun shipping servers equipped with the NVIDIA GH200 Grace Hopper™ Superchip, anticipating larger shipment volumes due to strong market demand [3] Group 2: Partnerships and Collaborations - Compal is collaborating with industry leaders such as AcBel Polytech Inc., Chenbro, Infinitix, Samsung Electronics, and ZutaCore® to present innovative solutions and insights at GTC 2025 [4] Group 3: AI and 5G Integration - Compal launched the AI server SX220-1N, integrating NVIDIA Aerial with 5G base stations to enhance network intelligence and efficiency, ultimately reducing operational costs [5] Group 4: Future Events - In addition to GTC 2025, Compal will also showcase its advanced GPU servers at CloudFest in Europe, providing an alternative platform for audiences to explore its AI and HPC technologies [7] Group 5: Company Background - Founded in 1984, Compal is a leading manufacturer in the notebook and smart device industry, recognized as one of Taiwan's top manufacturers and consistently ranked among the Forbes Global 2000 and Fortune Global 500 companies [8]

Core Insights - Compal Electronics, in collaboration with APAL, will showcase its NTN IoT technology at Satellite 2025, highlighting the APAL Hestia NTN IoT Dongle and its applications for stable connectivity in remote areas [1][11] - NTN IoT satellite communication technology is applicable in various sectors such as smart logistics, maritime communications, precision agriculture, green energy monitoring, environmental monitoring, and disaster response, enhancing global connectivity [2][3] Product Launch and Features - The Hestia NTN IoT Dongle will officially launch in the U.S. and be available on Amazon, emphasizing APAL's commitment to innovative connectivity solutions for mobile assets and IoT applications [4][9] - The dongle integrates satellite communications with terrestrial networks, supporting 3GPP NTN IoT with two-way communication, ensuring connectivity in areas lacking traditional mobile networks [5][10] Strategic Collaborations - APAL has formed a strategic partnership with Creative5, Inc. to enter the Satellite IoT market, focusing on smart energy management solutions for remote areas, including applications in UAVs and Unmanned Surface Vehicles [7][8] - The collaboration aims to enhance operational efficiency and reduce costs by integrating LoRaWAN with NTN communications for applications like satellite-enabled smart meters and disaster response [8] Market Expansion - The Hestia NTN IoT Dongle will be available for purchase on Amazon starting March 2025, with initial offerings including standard NTN versions and variants supporting NTN+LoRaWAN, WI-SUN FAN, and BLE MESH [9] - Enterprise customers can customize solutions via the APAL website, which includes value-added services such as data analytics software integration [9] Application Scenarios - Key applications of the Hestia NTN IoT Dongle include smart agriculture, emergency rescue, energy management, and transport tracking, facilitating real-time data transmission and enhancing industry intelligence [14]