Quantum Corporation boosts capital expenses by 40%
Hey there! Let's dive into some tech news about Quanta Computer Inc, a major player in the AI server game.
Quanta, a company known for its AI servers powered by Nvidia's chips, has revealed they're about to pump up their capital expenditure this year by a whopping 40%, reaching NT$20 billion! This move comes in response to the booming demand for AI servers from the big cloud service providers, like the US's hyper-scalers.
This quarter alone, Quanta's capital spending surged about 80% to NT$4.7 billion. They're seeing their key clients, the cloud service providers, keeping the investments in AI servers and data center infrastructure rolling, and top US hyper-scalers have recently confirmed they're either maintaining or upping their capital expenditure on AI devices.
However, the production of AI server racks isn't completely chip-free. Quanta's Chief Financial Officer, Elton Yang, mentioned that shipments of AI server racks might still be subject to the availability of those precious chips.
In the last quarter, Quanta started ramping up production of new AI servers based on Nvidia's GB200 chips. But guess what? The chip and component supply constraints are holding them back. For the current quarter, Quanta expects the demand for GB200-based servers to outpace that for servers running on Nvidia's Hopper-series chips.
As a result, the AI server revenue contribution will be higher this quarter, putting them on track to hit the 70% target this year. However, the demand for new-generation AI servers may squeeze their gross margin in the future.
Fun fact, servers are now the biggest revenue source for Quanta, making up about 70% of their total revenue last quarter. Notebooks, on the other hand, are taking a backseat, accounting for less than 25%. Quanta predicts a high-single-digit percentage growth in notebook shipments this quarter thanks to increased demand during the 90-day pause on US tariffs. But don't be surprised if this leads to a "muted" seasonal demand in the second half this year.
Quanta's net profit hit an all-time high in the first quarter at NT$19.5 billion, a 61.6% annual rise. They expect their operating margin to face a bit of pressure since they're boosting R&D spending to prepare for the production of next-gen AI servers powered by GB300 chips. Last quarter, their operating expenses shot up by 35.4%.
In case you were wondering, Rigetti Computing, involved in superconducting quantum computing, isn't directly related to Quanta's business trends. However, their focus on quantum computing highlights the broader trend towards advanced computing technologies, which could influence strategic decisions for companies like Quanta.
Remember, this is a quick rundown, but the details become more nuanced when you look at Quanta's financial reports or industry analyses specific to the company. Stay tuned for more updates!
As always, feel free to reach out if you need help with anything else tech-related. Cheers! 🤖🎉💻💼🚀⚛️🔬🔝✨🚀🚀
- Despite the surge in demand for AI servers from cloud service providers, the production of AI server racks might still be affected by the availability of designated chips, as mentioned by Quanta's Chief Financial Officer, Elton Yang.
- The revenue contribution from AI servers is expected to be higher this quarter, putting Quanta on track to meet their 70% target this year, as the demand for servers based on Nvidia's GB200 chips is projected to outpace that for servers using Nvidia's Hopper-series chips.
