Goldman Sachs: Taiwan Technology: Jentech (3653.TW): Management Visit: CPO, Heat Spreaders, and Liquid Cooling to Drive Future Growth
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs recently hosted a management visit with Jentech (3653.TW, unrated), where executives expressed optimism regarding growth through 2026 and 2027. The key drivers include rising heat spreader volumes and specification upgrades, fueled by AI infrastructure expansion, alongside a product extension into liquid cooling components like cold plates and micro-channel lids.
Jentech reported a 32% month-over-month revenue decline in February, attributed solely to fewer working days during the Lunar New Year. However, management anticipates a sharp rebound in March as cold plates and heat spreaders for next-generation rack-level AI servers enter production. Consequently, first-quarter revenue is expected to remain flat to slightly higher sequentially, with a much more pronounced acceleration anticipated in the third quarter of 2026 as these AI servers ramp significantly.
A leading global GPU supplier is projected to become Jentech's primary growth catalyst. Revenue exposure to this customer is expected to jump from under 15% in 2025 to roughly 30% in 2026, driving gross margin expansion. By 2027, co-packaged optics (CPO) switch stiffeners are forecast to contribute robust growth.
Management also highlighted the long-term promise of micro-channel lids, noting their superior thermal resistance for high-wattage chips. Goldman Sachs reiterated its bullish thesis on liquid cooling and high-speed connectivity, maintaining Buy ratings on related preferred names, including AVC, Auras, Fositek, LandMark, VPEC, Innolight, Eoptolink, TFC Optical, and Ruijie Networks.