Compal Electronics Inc. is betting big on artificial intelligence to drive its transformation beyond traditional PC manufacturing, with AI servers expected to contribute up to 20% of its server revenue this year.
CEO Anthony Peter Bonadero said the company is deepening its partnership with Nvidia Corp. on the MGX platform, with plans to establish production facilities in Texas. The Taiwanese contract manufacturer is targeting four major cloud service providers, focusing on inference and small-model applications.
The company’s strategic shift comes as it reported a breakthrough in profitability, with gross margins exceeding 5% and net profit jumping 38% in the first three quarters. Chairman Ray Chen said Compal is moving away from basic OEM and EMS services toward higher-value products.
To hedge against geopolitical risks, Compal has expanded manufacturing bases across nine countries, including Vietnam for consumer electronics, Poland and Indiana for automotive components, and India for mobile devices. The company maintains that AI PC penetration could reach 40% by 2026.
The manufacturer’s non-PC business, accounting for 25% of revenue, is diversifying into automotive electronics and 5G equipment, with the latter expected to see exponential growth this year. However, Chen acknowledged the company needs to carefully evaluate the impact of U.S. chip export controls on its AI initiatives.
