Gengxing spends 1.5 billion yuan to expand production in response to demand for AI terminal testing

Gengxing (6146), a major high-end testing and verification company, announced today that it has launched the largest capital expenditure plan in history. Spokesperson Pan Fengwen said at the press conference that in response to new business opportunities regulated by the U.S. Federal Communications Commission (FCC) and the surge in demand for AI terminal testing, it will invest approximately 1.5 billion yuan to expand factories, testing equipment and test sites. Specifically, it plans to add 50 test sites and recruit about 100 engineers. The first phase is expected to be put into operation by the end of this year, and the second phase will be put into operation in the first half of next year. After the completion of the two phases, the overall testing capacity is expected to increase by 20% compared with the current level.

Gengxing was invited to participate in the "Strategic Taiwan Investment Forum" hosted by Blackstone Finance today. Pan Fengwen bluntly said that the scale of this investment is the largest capital expenditure since its establishment. In view of the continued increase in high-end testing cases and the current shortage of production capacity, the company has decided to accelerate investment and plan in advance the testing market opportunities in the next few years.

Gengxing explained that the new factory is located near the Airport MRT A3 station, and the expansion project will be carried out in two phases. The first phase is expected to be gradually put into production before the end of this year, with the goal of obtaining TAF certification. After completion, it is conservatively estimated that the testing capacity will increase by more than 10%. The second phase is planned to be launched in the first half of next year, when the total new production capacity in the two phases will reach 20% of the existing capacity.

Gengxing also pointed out that another key to large-scale production expansion is mainly the adjustment of US FCC regulations, which will cause a large number of global orders to be transferred to Taiwanese manufacturers. On October 29, the FCC adopted a new regulatory system for testing laboratories in Non-Mutual Recognition Agreement (Non-MRA) countries and regions, restricting relevant laboratories from performing testing services required for US equipment certification, with a transition period until December 1, 2028. Cases originally executed in non-MRA regions will be transferred to compliance regions such as Taiwan at an accelerated pace, driving an increase in high-end testing orders.