Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Technology Hardware - **Focus**: Monthly and quarterly rack shipment forecasts for GPU AI server ODMs in 2025 Key Points 1. **Rack Shipment Forecasts**: The GB200/300 racks forecast remains at 28,000 units, with expectations for significant growth in Q4 to 14,000-15,000 racks, up from 8,000-8,500 in Q3 [3][11] 2. **October Rack Builds**: October rack builds increased approximately 3% month-over-month, indicating a positive trend for Q4 builds [3] 3. **GB200 and GB300 Developments**: GB200 rack builds are expected to continue into Q1 2026, while GB300 builds have commenced and are anticipated to ramp up smoothly without yield issues reported [3] Company-Specific Insights Quanta Computer Inc. (2382.TW) - **October Revenue**: Approximately NT$173 billion, a decrease of 6% month-over-month but an increase of 27% year-over-year - **Shipments**: Lower notebook shipments at 3.5 million units (-24% m/m), partially offset by higher GB200 rack output of 850-900 racks [4] Wistron Corporation (3231.TW) - **October Revenue**: NT$185 billion, down 9% month-over-month but up 92% year-over-year - **Shipments**: Slight decrease in L10 computing trays (300-350 rack equivalents, down 40-45% m/m) and a minor decline in notebook shipments at 2.1 million units [5] Hon Hai Precision (2317.TW) - **October Shipments**: GB200 rack shipments were stable at approximately 2,600 racks - **Future Expectations**: Anticipated increase in server rack shipments, contingent on customer schedules for infrastructure builds [6] Market Dynamics - **Market Share**: As of October 2025, Hon Hai holds 50% of the GB200/300 NVL72-equivalent rack supply, followed by Quanta at 22%, Wistron at 20%, and Wiwynn at 2% [17] - **Rack Mix Breakdown**: The GB200 racks account for 79% of the total, while GB300 racks make up 21% [20] Risks and Opportunities - **Upside Risks**: Better-than-expected demand for iPhones, AI server business growth, and potential M&A activities [25][26] - **Downside Risks**: Slower-than-expected AI server penetration, geopolitical issues affecting investments, and margin pressures from rising labor costs [28] Analyst Ratings - **Overall Industry View**: In-Line [8] - **Company Ratings**: - Quanta: Overweight - Wistron: Overweight - Hon Hai: Overweight [83] Conclusion The conference call highlighted a positive outlook for the Greater China Technology Hardware sector, particularly in the GPU AI server market, with significant growth expected in rack shipments. Company-specific performances varied, with some experiencing revenue declines while others showed strong year-over-year growth. The market dynamics indicate a competitive landscape with potential risks and opportunities that could impact future performance.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Greater China Technology Hardware sector, specifically the GPU AI server ODMs (Original Design Manufacturers) [1][7]. Core Insights and Arguments - The forecast for GB200/300 rack shipments has been raised to 28,000 units for 2025, up from approximately 27,600 units previously. This includes an estimated 8,500 units shipped in Q3 and a projected increase to 14,300 units in Q4, which is higher than the previous estimate of 13,200 units [3][9]. - The increase in rack shipments is not expected to impact NVIDIA, as these are downstream builds. Q3 shipments are in line with expectations, and there is potential upside for Q4 2025 and 1H 2026 [3][9]. - Quanta's September revenue was approximately NT$184 billion, reflecting a month-over-month increase of 20% and a year-over-year increase of 19%. This growth is attributed to higher notebook shipments and increased GB200 rack output [4]. - Wistron's September revenue reached NT$203 billion, an 18% month-over-month increase and a significant 110% year-over-year increase. The growth is driven by a substantial increase in computing tray shipments [5]. - Hon Hai's GB200 rack shipments were approximately 2,600 racks in September, contributing to a year-to-date total of around 6,900 racks [5][9]. Additional Important Information - The report indicates that actual deliveries to end customers may be lower than reported figures due to the inclusion of Wistron's computing tray equivalents without accounting for assembly and testing times [11]. - The market share for GB200/300 NVL72-equivalent rack supply is dominated by Hon Hai (50%), followed by Quanta (22%), Wistron (20%), Wiwynn (2%), and others (6%) [16]. - For 2026, it is challenging to forecast rack shipments, but an assumption of around 2 million Blackwell chips could lead to an estimated 60,000 to 70,000 racks [10]. - Risks to the upside include better-than-expected demand for iPhones and AI servers, while risks to the downside involve geopolitical developments and slower-than-expected progress in the AI server business [24][27]. Valuation Methodology - The valuation for Hon Hai is based on a residual income model with key assumptions including a cost of equity of 8.5%, a medium-term growth rate of 13%, and a terminal growth rate of 3% [20]. - Quanta's valuation also follows a residual income model with a cost of equity of 9.0% and similar growth assumptions [21]. - Wistron's valuation is based on an 8.7% cost of equity and a medium-term growth rate of 7.0% [22]. This summary encapsulates the essential insights and data from the conference call, providing a comprehensive overview of the current state and future outlook of the Greater China Technology Hardware sector.