Taiwan ODM/Brands: 3-Month Preview - Mar +13% MoM on Avg; AI and Cooling Drive Solid YoY Growth
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Goldman Sachs previews three-month revenue trends for 10 Taiwan-based AI server and PC supply chain companies, updating estimates for Wistron, Quanta, Pegatron, and Wiwynn. Average revenue for these companies is projected to grow 13% month-over-month in March 2026, decline 2% in April, and increase 8% in May. Year-over-year growth is expected to remain strong at 28%, 26%, and 23% for March, April, and May respectively.
This growth is primarily driven by the ramp-up of rack-level AI servers, increasing penetration of ASIC AI servers, and rising adoption of liquid cooling technologies. Apple's supply chain stands to benefit from upcoming form factor changes, including a foldable phone in 2026 and the iPhone 20 in 2027.
Goldman Sachs assigns Buy ratings to Hon Hai, Wiwynn, Wistron, and AVC. Neutral ratings are given to Gigabyte, Quanta, Inventec, Compal, and ASUS, while Pegatron is rated Sell. AVC and Wistron are expected to lead year-over-year growth due to ongoing GPU and ASIC AI server volume ramp-ups. Conversely, Compal, ASUS, and Inventec face revenue declines attributed to significant PC exposure and rising memory costs.
Notably, Hon Hai's March revenue is modeled to surge 39% month-over-month and 50% year-over-year, supported by AI server rack shipments. Quanta is projected to grow 12% month-over-month in March, driven by cloud infrastructure demand. Pricing targets remain anchored to forward earnings multiples, such as Hon Hai at NT$400 based on 21.0 times 2026E P/E.