Taiwanese contract manufacturer Compal Electronics secured a server order from Dell Technologies worth hundreds of billions of New Taiwan dollars (approximately US$3.3-16.5 billion), with deliveries expected to begin in the second half of 2025, according to market reports.
Dell’s Infrastructure Solutions Group posted record quarterly revenue of $16.8 billion in Q2, up 44% year-over-year, with servers and networking revenue reaching $12.9 billion, a 69% increase. Dell’s Chief Operating Officer Jeff Clarke indicated strong market demand for the company’s AI solutions.
The news sent Compal shares to their daily limit of NT$34.5 (US$1.14), marking a 24% gain over the past month as investors bet on the AI server boom.
Compal’s board approved US$300 million in American investments last month, including US$225 million to expand Compal Americas and US$75 million for a new subsidiary, aimed at reducing trade policy risks and strengthening North American operations. The company plans to start mass production at its new US facility in the first half of 2026.
Chairman Chen Jui-tsung acknowledged that server revenue currently represents less than 2% of total sales but projected double-digit growth this year. The executive, who attended Nvidia CEO Jensen Huang’s exclusive industry dinner in May after years of being excluded, signaled Compal’s entry into the chip giant’s supply chain.
Compal reported its best gross margin in 15 years at 5.2% in the first quarter, benefiting from reduced dependence on low-margin electronics manufacturing as it diversifies into higher-value server products.
