2026-01-08 10:42Summary of Key Points from the Conference Call Industry Overview - AI Hardware Market: The AI hardware market is expected to grow significantly, with GPU AI server shipments projected to increase at a 31% CAGR from 2025 to 2027, leading to a total server market value of approximately US$650 billion by 2027 [1][17][20]. - Data Center Investments: Over US$800 billion in data center investments are planned, but potential delays may arise due to infrastructure readiness, policy changes, and labor shortages, which could impact AI capital expenditures in 2027 [1][20]. Company-Specific Insights Delta Electronics - Rating: Outperform with a price target of NT$1,300. - Growth: Expected EPS CAGR of 34% from 2025 to 2027, driven by a broad power portfolio and increased in-house liquid cooling production [5][8]. Luxshare - Rating: Outperform with a price target of RMB 74. - Market Position: Anticipated to ramp up server component shipments to U.S. customers, benefiting from strong sentiment in the Apple supply chain [5][12]. Chroma ATE - Rating: Outperform with a price target of NT$970. - Long-term Outlook: Positive long-term prospects due to the ability to capitalize on global tech trends, with EPS estimates raised for 2026-27 [5][9]. Unimicron Technology - Rating: Outperform with a price target of NT$270. - Market Momentum: Expected strong stock performance in the near term due to favorable substrate pricing and improving HDI yield [5][10]. Quanta Computer - Rating: Underperform with a price target of NT$250. - Challenges: Anticipated margin pressures due to the buy-sell model for AI servers, with AI server mix expected to represent 60%-65% of total revenue in 2026-27 [5][11]. Sunny Optical - Rating: Outperform with a price target of HK$88. - Revenue Mix: Growth in non-smartphone revenue is expected to support margins, despite concerns over memory pricing impacts [5][13]. Largan Precision - Rating: Market-Perform with a price target of NT$2,600. - Short-term Opportunity: Tactical long opportunity ahead of the iPhone 18 launch, but long-term caution due to limited diversification beyond smartphones [5][14]. Market Dynamics - Power Components: The total addressable market (TAM) for NVIDIA server power components is expected to grow by 70-85% year-over-year in 2026-27, with strong demand for liquid cooling and HDI providing margin support for leading suppliers [2][31]. - Competition: Rising competition in cooling components is expected to pressure pricing in the second half of 2026, particularly if NVIDIA standardizes the L10 board for Vera Rubin [2][32]. Consumer Electronics Insights - Apple vs. Android: The Apple supply chain is viewed as more attractive than Android's, with iPhone shipments expected to grow at a low-to-mid-single digit rate in 2026-2027, driven by new product launches and enhanced AI features [3][39]. - AI Glasses Market: The market for AI glasses is projected to grow significantly, with shipments expected to reach approximately 10 million units in 2025 and close to 20 million by 2029 [41][50]. Investment Implications - Overall Sentiment: The investment sentiment remains positive for companies like Delta, Luxshare, and Chroma, while caution is advised for Quanta due to margin pressures. The overall outlook for the AI hardware market is robust, with significant growth expected in the coming years [5][8][12][11].