ASUSTeK Computer Inc.. reported declining quarterly profit despite robust growth in artificial intelligence servers, as foreign exchange volatility and U.S. trade tensions squeezed margins across the Taiwan-based technology manufacturer.
Net income fell to NT$9.81 billion ($327 million) in the second quarter, down 23% from the previous period and 17% year-over-year, according to results disclosed at the company’s investor conference Tuesday. Revenue climbed 27% quarter-over-quarter to NT$188.01 billion ($6.27 billion), driven by gaming and commercial computer sales.
The mixed performance reflects broader challenges facing technology manufacturers navigating tariff uncertainties while investing heavily in AI infrastructure. Operating margins compressed to 4.17% from 8.52% in the prior quarter, falling short of management’s 4-5% full-year target range.
ASUS announced it has secured substantial orders from international cloud service providers for its GB300-based AI servers, with mass production scheduled to begin by the end of the third quarter. AI server revenue represented 15% of total sales in the second quarter, up from double-digit percentages in the first quarter.
Chief Financial Officer Jason Wu projected third-quarter PC revenue will increase 5-10% sequentially, while component and server businesses may remain flat compared to the previous period. The executive cited persistent headwinds from currency fluctuations and tariff impacts but suggested these pressures should diminish over the coming quarters.
Gaming hardware sales surged 40% year-over-year in the first half, while commercial PC revenue jumped 45%. The company plans to launch new Xbox gaming handheld devices in the second half to capitalize on this momentum.
Despite the AI server expansion, ASUS faces intensifying competition from established data center suppliers and margin pressure from component costs. The company’s emphasis on high-performance gaming and AI-focused products reflects attempts to differentiate from commodity PC manufacturers, though execution remains challenging in volatile market conditions.
