Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Technology Hardware - **Focus**: Monthly and quarterly rack shipment forecasts by Original Design Manufacturers (ODMs) for GPU AI servers Key Companies Discussed 1. **Quanta Computer Inc. (2382.TW)** - January revenue: NT$231 billion, a decrease of 15% month-over-month (m/m) but an increase of 62% year-over-year (y/y) [3] - Estimated rack shipments: ~1.4K in January, down from 1.6-1.7K in December, with a target of ~4K racks in 1Q26 [3] 2. **Wistron Corporation (3231.TW)** - January revenue: NT$228 billion, a decrease of 11% m/m but an increase of 152% y/y [4] - Notable decline in notebook (NB) shipments: 1.7 million units, down 35% m/m [4] - L10 computing tray shipments increased to 900-1,000 rack equivalents [4] 3. **Hon Hai Precision (2317.TW)** - January GB200 rack shipments: ~2.4K, down from ~2.8K in December [5] - Expected growth in rack shipments for February and March, targeting ~8.5K for 1Q26, a 9% increase quarter-over-quarter (q/q) [5] Core Insights - **Rack Shipment Forecast**: Anticipated 70-80K racks in CY26, with over 100% y/y growth expected compared to ~29K last year [2] - **Delivery Adjustments**: Actual rack deliveries to end-customers may be lower than reported due to unaccounted assembly and testing times [2] - **Monthly Output Estimates**: - Total GB200/300 rack output in January estimated at ~6.2K, with Quanta at ~1.4K, Wistron at 0.9-1.0K, and Hon Hai at ~2.4K [9] Market Dynamics - **Growth Drivers**: Strong demand for GPU AI servers and increased penetration in the AI server market are key growth factors [2][27] - **Risks**: Potential risks include geopolitical developments, slower-than-expected AI server penetration, and fierce competition in the mega data center segment [27][29] Valuation Methodology - **Hon Hai**: Residual income valuation model with a cost of equity of 8.5%, medium-term growth rate of 13%, and terminal growth rate of 3% [23] - **Quanta**: Residual income model with a cost of equity of 9.0%, medium-term growth rate of 8.5%, and terminal growth rate of 3% [24] - **Wistron**: Residual income valuation with an 8.7% cost of equity, 7.0% medium-term growth rate, and 3% terminal growth rate [25] Additional Insights - **Market Share**: In 2025, Hon Hai held 51% of the GB200/300 NVL72-equivalent rack supply, with Quanta at 21% and Wistron at 20% [18] - **Future Projections**: For 2026, projected market shares are Hon Hai at 45%, Quanta at 20%, and Wistron at 15% [21] This summary encapsulates the key points from the conference call, focusing on the performance and outlook of major players in the Greater China Technology Hardware sector, particularly in the GPU AI server market.

Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Technology Hardware - **Focus**: Monthly and quarterly rack shipment forecasts for 2025, specifically for GPU AI server ODMs Key Companies Discussed 1. **Quanta Computer Inc. (2382.TW)** - November revenue: ~NT$193 billion (+11% month-over-month, +36% year-over-year) [4] - Estimated GB200/300 rack shipments in November: 1.0-1.1k racks (up from 850-900 racks in October) [4] - Expected slight decline in December shipments, with a total of ~2.6k racks in 4Q25 [4] 2. **Wistron Corporation (3231.TW)** - November revenue: Record high at NT$281 billion (+52% month-over-month, +195% year-over-year) [5] - Higher L10 computing trays shipments: 1.2-1.3k rack equivalents (up from 300-350 in October) [5] - Notebook shipments: 2.2 million (+5% month-over-month) [5] 3. **Hon Hai Precision (2317.TW)** - November GB200 rack shipments: ~2.6k racks (flat month-over-month) [6] - Expected lower server rack shipments in December due to year-end holidays [6] Core Insights and Forecasts - **Rack Shipment Forecasts**: - Total GB200/300 racks forecast for 2025: 27.3k (revised down from 28k) [3] - 4Q25 rack builds expected to grow materially quarter-over-quarter to 13.5-14k racks, up from 8-8.5k in 3Q [3] - 4Q25 rack builds for Quanta adjusted to 2.5k (down from ~3.5k) due to conservative management outlook [3] - **Market Dynamics**: - Wistron’s stronger momentum led to an increase in rack builds by ~300 racks in 4Q [3] - Anticipated growth in AI revenue for Quanta in 1Q26, indicating a positive outlook for the sector [3] Additional Insights - **Future Projections**: - Initial thoughts for 2026 suggest potential for 70-80k racks, up from previous estimates of 60-70k, based on inventory assumptions of ~2 million Blackwell chips [11] - **Market Share**: - Rack supply share for 2025: Hon Hai (52%), Wistron (21%), Quanta (19%), Wiwynn (2%), Others (7%) [20] - **Revenue Trends**: - Quanta and Wistron showing significant year-over-year revenue growth, indicating strong demand in the technology hardware sector [4][5] Risks and Considerations - **Upside Risks**: - Better-than-expected demand in AI server business and potential M&A activities [28] - **Downside Risks**: - Slower-than-expected AI server penetration and geopolitical developments affecting foreign investment [30] This summary encapsulates the key points from the conference call, focusing on the performance and outlook of major players in the Greater China Technology Hardware industry, particularly in the context of GPU AI server rack shipments.