Investment Rating - The report maintains a "Buy" rating for Wiwynn Corporation with a target price of TWD3,400, implying approximately 32.8% upside from the current price of TWD2,560 [4][21][22]. Core Insights - The report highlights stronger growth in ASIC servers compared to GPU servers, with expectations for continued momentum into the second half of 2025 [2][7]. - Major PC ODMs experienced a significant pull-in in notebook shipments in June 2025, with a 22% month-over-month increase and an 11% quarter-over-quarter rise, exceeding previous guidance [1][3]. - The overall outlook for notebook shipments in the second half of 2025 remains cautious due to unclear consumer demand, with a forecasted year-over-year growth of only 3% [3][4]. Summary by Sections ASIC Server Outlook - The demand for ASIC servers is expected to strengthen in the second half of 2025, particularly driven by AWS's Trainium 2 servers, with a forecast of sequential double-digit growth in rack shipments [2][4]. - The yield rate for GB200 server rack assembly is anticipated to improve from below 50% in the second quarter of 2025 to 60-70% in the second half of 2025 [2]. Notebook Market Analysis - The early pull-in of notebook shipments is largely completed, with a muted growth outlook for the second half of 2025 due to ongoing consumer demand uncertainty [3][4]. - The report estimates a 1% quarter-over-quarter increase in notebook shipments for the third quarter of 2025, which is below seasonal norms [3]. Stock Recommendations - Wiwynn is favored due to its strong revenue outlook supported by accelerating ASIC server shipments, with Oracle expected to contribute 7% to Wiwynn's revenue in 2025 [4][7]. - The report emphasizes the potential for additional upside from Oracle beyond 2025, driven by market share shifts and an expanding addressable market [4].

General servers seeing order increase: We previously expected a more front-loaded general servers demand in 1H25 but now we have been seeing order increases from the US CSPs into 3Q25e. According to a recent statement made by a few Taiwan server ODMs and component suppliers, we are seeing a potential upside for 2H25's general servers' demand, driven by AWS and Microsoft. Meta hasn't seen upward revision for 2H25 but we expect potential order increases supported by a more backend loaded capex outlook (exhibi ...

6 June 2025 Asia Tech Hardware Server ODM/OEM primer (2025) - Players, Positioning and Profitability Alex Wang, CFA +852 2123 2613 alex.wang@bernsteinsg.com Shirley Yang, CFA +852 2123 2660 shirley.yang@bernsteinsg.com Ethan Xu +852 2123 2634 ethan.xu@bernsteinsg.com We published a primer on server ODM/OEM in Oct 2024. This updated version include the ASIC server segment, and the competition landscape changes among GPU AI servers outside of China. For investors interested in China AI server, please refer to ...