Inventec Sees Strong AI Server Growth Continuing Into Next Year

Preface

Inventec (英業達, 2356-TW) held an investor conference on the 10th, where General Manager Tsai Chih-an (蔡枝安) said that the company’s view of AI demand has not changed. Inventec expects strong server growth next year, led by GPU and ASIC AI servers. The company anticipates high double-digit year-over-year growth in both revenue and shipments for these products, while projects newly secured this year are expected to contribute progressively in 2027 to 2028. This article reviews Inventec’s server mix and product platforms, the outlook for conventional servers and notebooks, potential supply constraints, and the company’s latest financial results. Together, these details show how AI-related demand is shaping the company’s growth outlook while customer spending patterns and component availability continue to influence execution.

Lazy bag

Inventec expects AI server demand to remain robust next year, with GPU and ASIC products representing the main growth drivers. The company forecasts high double-digit year-over-year growth in both related revenue and shipments, and sees new projects beginning to contribute during 2027 to 2028. GPU products currently account for a larger share of revenue, while ASIC products lead in shipment volume. Long lead-time materials are comparatively well managed, but urgent orders may still face shortages. Third-quarter revenue rose 57.57% year over year to 2720.94 billion yuan, while first-three-quarter revenue increased 42.77% year over year to 7422.61 billion yuan.

Main Body

At its investor conference on the 10th, Inventec said that its assessment of AI demand remains unchanged. General Manager Tsai Chih-an said the server business is expected to maintain strong growth next year. GPU and ASIC AI servers are expected to remain the largest contributors to the company’s server activity, with both revenue and shipments projected to increase by a high double-digit percentage year over year. Inventec also said that projects secured this year are expected to begin making a greater contribution over 2027 to 2028.

The company described a difference between its current AI server revenue mix and shipment mix: GPU products account for a greater proportion of revenue, whereas ASIC products represent a larger share of shipment volume. This distinction reflects the differing commercial and production profiles of the two categories. Inventec did not provide further numerical details on those proportions, but said GPU and ASIC systems together are expected to remain the principal sources of server momentum next year.

Inventec said it secured new projects this year and that its rack-related business continues to expand. It expects the proportions of L10 and L11 products to rise further. L11 recorded comparatively strong growth this year, and the company expects that momentum to continue into next year. These product-level trends form part of a broader shift toward more integrated AI server systems, where rack and system configurations are important alongside the underlying computing platforms.

The company also outlined the system levels associated with several platforms. NVIDIA (輝達, NVDA-US) identifies its next-generation Vera Rubin platform primarily with L11 and L12, while its HGX architecture is mainly associated with L10 and L11. AMD (AMD, AMD-US) is primarily associated with L6. ASIC systems cover TPU and ARM designs; Inventec currently mainly supplies L6 and L10 products in this category, and expects more L10 ASIC products next year. These descriptions indicate that Inventec’s work spans multiple platform and system configurations rather than relying on a single design type.

For general-purpose servers, Inventec said shipments of traditional x86 servers are affected by capital being directed toward other uses, and that enterprise customers have a relatively cautious outlook. At the same time, demand from CSP customers continues to grow. This creates a mixed picture: spending among some enterprise buyers is restrained, while cloud service providers continue to support demand. The company’s comments distinguish this conventional server market from the stronger expected growth in AI-oriented systems.

Investors also asked whether the Democratic Party’s victory in the U.S. midterm elections would affect Inventec’s operations. Tsai said that, based on observations from customers, the company has not seen an impact and its outlook has not changed. He added that demand from CSP customers remains strong. NeoCloud customers, in Inventec’s assessment, are not inherently affected by U.S. political factors; the company said that the more relevant issue to monitor for this segment is the possibility of capital being crowded out or redirected.

Component availability remains another operational consideration. Tsai said Inventec has relatively strong control over materials with long lead times. However, when customers place urgent orders, supply can become tighter, potentially preventing the company from meeting demand and affecting shipments. He noted that once components arrive, Inventec can assemble and ship products quickly. The company also said it does not have a problem with finished goods accumulating as inventory. Inventec hopes component shortages will gradually improve next year, though its comments indicate that the timing of material availability can still influence near-term fulfillment.

In its notebook business, Inventec sees the market potentially reaching a bottom this year. Next year, a replacement cycle among enterprise customers and demand for AI PCs could support a market that is flat to slightly higher. The company’s outlook is therefore more measured than its AI server forecast: notebooks may stabilize and grow modestly, while AI servers are expected to deliver stronger expansion.

Inventec reported third-quarter revenue of 2720.94 billion yuan, up 0.83% quarter over quarter and 57.57% year over year. Gross margin was 4.17%, down 0.06 percentage points quarter over quarter and 0.97 percentage points year over year. Operating margin was 1.61%, down 0.15 percentage points quarter over quarter and 0.17 percentage points year over year. After-tax net profit was 25.38 billion yuan, down 34.84% quarter over quarter and 7.03% year over year, while earnings per share were 0.71 yuan.

For the first three quarters of the year, Inventec recorded cumulative revenue of 7422.61 billion yuan, an increase of 42.77% year over year. Gross margin was 4.44%, down 0.91 percentage points year over year, and operating margin was 1.71%, down 0.24 percentage points year over year. After-tax net profit reached 88.61 billion yuan, up 33.8% year over year. These figures show substantial revenue and net profit growth over the period alongside lower gross and operating margins compared with the prior-year period.

Overall, Inventec’s outlook combines strong expectations for AI server growth with more cautious assumptions for traditional x86 servers and a potential stabilization in notebooks. Its ability to convert demand into shipments will depend in part on material availability, particularly when urgent orders arise. The company expects newly secured projects to contribute in 2027 to 2028, extending the potential growth runway beyond next year.

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