Summary of Conference Call Transcript Industry Overview - **Industry**: Greater China Technology Hardware, specifically focusing on thermal solutions for AI GPU/ASIC server racks in the Asia Pacific region [1][2] Key Companies Discussed - **Asia Vital Components Co. Ltd. (AVC)** [10] - **Fositek Corp (6805.TW)** [10] - **Auras Technology Co. Ltd. (3324.TWO)** [10] - **Sunonwealth Electric Machine Industry Co. (2421.TW)** [10] Core Insights and Arguments - **Growth Outlook**: - Stronger growth expected in 4Q25 with revenue for AVC and Auras projected to grow over 20% QoQ, driven by GB300 project shipments and increased content value [4] - Continued shipment strength anticipated into 1Q26 [4] - **Cooling Component Design**: - Upgrades in cooling component design are ongoing, with the Vera Rubin platform expected to utilize cold plate modules as the primary thermal solution [5] - Potential upgrades to micro-channel cold plates and lids are anticipated, with final designs expected in 2H26 [5] - **ASIC Server/Rack Projects**: - Incremental upside expected from liquid-cooled server rack projects, including AWS Trainium 3 and Meta's MTIA projects scheduled for 2H26 [6] - Google TPU servers are expected to diversify supply chains to Asia next year [6] - **Investment Recommendations**: - AVC is favored among thermal stocks due to the removal of MCL replacement concerns and positive sentiment from Nvidia's consignment of cold plate modules [7] - Auras and Sunon are rated as equal weight (EW) due to fair risk-reward at current levels [8] Financial Estimates and Price Target Revisions - **Earnings Estimates**: - AVC's earnings estimates for 2025, 2026, and 2027 have been raised by 14%, 32%, and 36% respectively, reflecting higher revenue from AI-related shipments and improved operating margins [34] - Fositek's earnings estimates for the same period have been increased by 7%, 19%, and 23% respectively, due to faster NVQD shipment ramp and improved gross margins [46] - **Price Target Changes**: - Price targets for AVC raised from NT$1,288 to NT$1,800 (+40%) [36] - Price targets for Fositek and Auras also revised upwards, reflecting positive earnings revisions [10] Market Performance - **Stock Performance**: - Thermal stocks have seen significant rallies since April 2025, with AVC and Fositek's share prices more than tripling, Auras' share price doubling, and Sunonwealth's share price increasing by 75% [17] - **Valuation**: - Despite strong share price performance, current valuations for thermal stocks are not considered stretched, remaining within one standard deviation of the two-year average P/E multiple [18] Additional Insights - **Liquid Cooling Content Value**: - The cooling component value for GB300 server racks is estimated at US$49,860 per rack, with significant increases in component values expected for future designs [27][28] - The total thermal content value for Vera Rubin racks is projected to be US$55,710 [32] - **Catalyst Events**: - Upcoming analyst meetings for AVC, Auras, Fositek, and Sunon are expected to provide further insights into margin trends and business outlooks for 4Q25 and 2026 [16] This summary encapsulates the key points from the conference call, highlighting the growth prospects, financial revisions, and market dynamics within the Greater China Technology Hardware sector, particularly in thermal solutions for AI computing.