Shengming Electric Law Conference: The fourth quarter welcomes the peak season, and new products such as Huida VR200 will be mass-produced and shipped

Shengmingdian held a Dharma teaching session today. The picture shows General Manager Luo Zhiji.

Luo Zhiji, general manager of server casing manufacturer Shengmingdian (3013), said today that the fourth quarter has entered the traditional peak season of the industry, and new products such as NVIDIA VR200 servers will be mass-produced and shipped, and the operation in the fourth quarter is viewed positively. In addition, Shengmingdian has continued to expand the production capacity of Taiwan and Thailand factories in recent years. The second phase of the project in Thailand has strengthened cabinet production capacity. The paint line is currently in trial production and will be put into production in the first half of next year.

Shengming Electric currently has two factories in China, as well as a factory in Zhongli, Taiwan and a factory in Thailand. Luo Zhiji pointed out that Shengming Electric’s capital expenditure last year was nearly 700 million yuan. This year it will be flat or slightly increased, and next year it will maintain a level of 700 to 800 million yuan. It will mainly be used to expand factories in Taiwan and Thailand. Currently, production capacity is intact. In terms of production, only shortages of electronic materials such as memory, hard disks, and PCBs may cause shipment delays.

Shengmingdian has continued to cultivate cabinet business opportunities in recent years. In the first eight months of this year, servers accounted for 73% of the total business, L11 system assembly business accounted for 18%, molds accounted for about 6%, and others accounted for about 3%. Among them, products such as L11 and chassis assembly have better gross profit margins. Luo Zhiji also pointed out that at present, customers often purchase RPU and ACL sidecar, especially the newly built AI data center, which prefers water-to-water and has a positive view on demand.

Luo Zhiji also said that 70% to 80% of the projects this year will focus on cabinet products. He is optimistic that water-cooling products are expected to maintain growth next year, and will actively invest in new cabinet design projects to ensure future orders. In addition, double-width cabinet products are still being tested, and single-width cabinets are currently mainly shipped. However, Luo also expects that the proportion of ASIC products will increase next year, thanks to the openness of the four major cloud service providers (CSPs) to different chips.