Advantech's North American business is strong, revenue in the first half of the year reaches US$430 million, and full-year challenge exceeds US$1 billion

Niu Wenzhong, general manager of Advantech North America, said today that local business has continued to grow rapidly this year, with revenue in the first half of the year reaching US$430 million. Revenue in the second half of the year is expected to increase by at least 50% from the first half, and there is a chance that the full year will exceed US$1 billion.

Advantech (2395) has strong demand in the U.S. market. Niu Wenzhong, general manager of North America, said today that the local business has continued to grow rapidly this year, with revenue in the first half of the year reaching US$430 million. Revenue in the second half of the year is expected to increase by at least 50% from the first half of the year, and has the opportunity to exceed US$1 billion for the whole year. Order momentum remains high at the same time. As of the end of August, the North American order-to-bill ratio (B/B Ratio) is about 2.15, and it is expected to remain around 2 by the end of the year.

Niu Wenzhong pointed out that the growth momentum of Advantech North America this year comes from vertical markets such as medical care, semiconductor equipment and robots. Medical care has long been the largest industrial market in North America. Currently, Advantech has cooperated with 28 of the top 30 medical manufacturers in the United States. Semiconductor equipment has entered a period of rapid growth. This year’s related performance is expected to increase by 75% annually, and next year is expected to grow by 120% compared with this year, becoming another major growth engine in North America.

In addition to the high level of existing orders, the level of Design Win (design import) that reflects mid- to long-term operations has also continued to increase. Niu Wenzhong said that Advantech North America's Design Win amount in 2025 will be approximately US$400 million. The first half of this year has exceeded last year's full year, and the second half of the year is expected to be at least the same as the first half, or even higher. Therefore, the full-year Design Win of this year is expected to be more than double that of last year.

Niu Wenzhong explained that Advantech will observe the current year's performance development from Back Order (undelivered orders), and then predict future operations through Design Win. Since a Design Win usually takes 18 to 24 months to start contributing revenue, the current accumulated Design Win is not just focused on next year, but is preparing for the next year or even longer-term operations.

Due to the rapid increase in customer demand, Advantech will continue to expand production capacity in North America. Niu Wenzhong said that in addition to encouraging employees to work overtime through bonuses, Advantech is also accelerating the transfer of production of some projects from Northern California to Southern California to cope with current demand. It is expected that production capacity will be able to fully catch up with demand in the second half of next year.

Niu Wenzhong mentioned that Advantech has also planned to further increase production capacity in Southern California and has begun evaluating land purchases as preparations for future production base expansion. However, Advantech does not follow the large-scale manufacturing route in the United States, but focuses on system integration and high-value-added services. Currently, it does not have a surface mount technology (SMT) production line, and its production layout is still centered on its southern and northern California bases.

From a market perspective, semiconductor equipment is one of the fastest growing fields for Advantech in North America at this stage. Niu Wenzhong pointed out that Advantech has cooperated with the top three semiconductor equipment manufacturers in the United States. Since relevant customers require product life cycles to be as long as 10 years, and components, production bases and even process changes must be re-verified by customers, the entry threshold for suppliers is relatively high. This has also become an important area for Advantech to deepen the North American market.

As for the next wave of growth opportunities, Advantech is also actively entering the robot market. Niu Wenzhong mentioned that there are currently more than 20 robot-related projects under negotiation, and more than 5 projects have been signed. However, humanoid robots are still in the early stages of industrial development. Although there are many new companies, funding requirements and operational risks are also high. Therefore, Advantech is still focusing on seizing project opportunities and expanding customer base at this stage.

In response to the rising demand for local supply chains in the U.S. market, Advantech has continued to strengthen its North American design and manufacturing capabilities. Currently, there are approximately 40 software, hardware, mechanical and system engineers in the U.S., with plans to increase to more than 75 in three years. Niu Wenzhong said that some products are designed directly in the United States and produced by local partners, which can improve local manufacturing capabilities and look at the competitive layout after 2028 to 2029.