AI server new products set to ramp, Wiwynn maintains Buy and NT$10,000 target price

Overview

Goldman Sachs believes Wiwynn’s 2Q26 results were broadly in line with expectations, while July revenue rose MoM driven by steady growth in general-purpose servers and mass production of a major ASIC customer’s next-generation air-cooled AI servers. Although a high base in general-purpose servers may lead to MoM revenue declines in August and September, liquid-cooled ASIC servers and GPU AI server racks are expected to accelerate their ramp-up from 4Q26. The company significantly raised capex and expanded financing, further validating AI server demand and its global capacity expansion plan.

Core views

Near-term revenue cadence may be affected by a high base in general-purpose servers and a business model shift from outright sales to consignment, but AI server product expansion, customer expansion, and mass production of new products will drive a clear acceleration in growth in the second half. Goldman Sachs expects 3Q26 revenue to grow 22% QoQ and 4Q26 revenue to grow 32% QoQ; it is also positive on Wiwynn’s leading position in ASIC AI server ODM and the potential for its business to extend from ASIC to GPU servers. Based on 2Q26 results and July revenue, Goldman Sachs adjusted its 2026-2028 net profit forecasts by -2%, 0%, and +4%, respectively, and maintained its Buy rating.

Analysis framework

The report revises 2026-2028 revenue and profit forecasts by combining monthly revenue tracking, quarterly income statement comparisons, and analysis of product mix and business model changes; valuation uses 2027E P/E, with the target multiple determined based on the correlation between forward P/E and EPS growth among PC and server peers.

Methodology notes

• Valuation methodsForward P/E valuation method

  Calculate the 12-month target price using 2027E EPS and a 20x target P/E.

  The 20x target P/E is determined based on the correlation between forward P/E and EPS growth among PC and server peers, and reflects Wiwynn’s leading position in ASIC AI server ODM as well as its product and customer expansion prospects.

• Earnings forecastProduct-by-product and quarterly forecast

  Forecast revenue and profit based on the mass production cadence of general-purpose servers, ASIC AI servers, and GPU AI servers.

  The forecast incorporates factors including the transition to a consignment model, early pull-in of general-purpose servers in the first half, the 4Q26 ramp-up of liquid-cooled ASIC and GPU servers, product mix changes, and R&D investment.

• Peer comparisonPeer growth and valuation correlation analysis

  Compare peers’ 2027E P/E with 2027-2028 EPS growth.

  The target valuation is relatively high versus the company’s historical level, mainly supported by expected 34% YoY EPS growth from 2027 to 2028 and expansion of the AI server business.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Wiwynn (6669.TW)

  Core covered company and beneficiary of AI server ODM

  Strengths

  Has a leading position in ASIC AI server ODM, major customers’ new products have entered mass production, and the company is expanding into liquid-cooled ASIC, GPU server racks, and more customers and SKUs.

  Weaknesses

  Customer and product mass production cadence has a significant impact on quarterly results; the shift of general-purpose servers to a consignment model will reduce reported revenue, and R&D expansion may raise the expense ratio.

  Comparison

  20x 2027E P/E is above the company’s historical average plus one standard deviation, but is supported by its leading position in AI servers, business expansion, and higher expected EPS growth.

  Risks

  AI server demand below expectations, slower-than-expected recovery in general-purpose server demand, intensifying competition in the server ODM market, and delays in new product mass production or customer expansion.

Key data

• July 2026 revenueNT$117.686bnUp 39% YoY and 6% MoM, 3% above Goldman Sachs’ forecast.
• 2Q26 revenueNT$278.153bnUp 26% YoY and 1% QoQ, in line with Goldman Sachs’ forecast.
• 2Q26 gross margin9.3%Higher than Goldman Sachs’ forecast of 8.5% and Bloomberg consensus of 8.4%, driven by the consignment model, product mix, and NRE fees.
• 2Q26 net profitNT$14.969bnUp 23% YoY and 6% QoQ, 2% above both Goldman Sachs and Bloomberg expectations.
• 3Q26 revenue forecastNT$340.402bnExpected to grow 28% YoY and 22% QoQ.
• 4Q26 revenue forecastNT$450.156bnExpected to grow 54% YoY and 32% QoQ, mainly driven by the ramp-up of new AI server products.
• 2026 capexup to approximately NT$40bnOf which the 2H26 capex budget is US$942mn, for capacity expansion and R&D in the United States, Mexico, and Malaysia.
• New financingNT$15bn convertible bonds and US$1.5bn bank loanFor capacity expansion, R&D investment, and working capital replenishment.
• Net profit forecast revisions2026E -2%; 2027E 0%; 2028E +4%2026 revenue forecast lowered by 6%, while 2027 and 2028 revenue forecasts raised by 2% and 5%, respectively.
• Target price and valuationNT$10,000; 20x 2027E P/ERating maintained at Buy, with 2027-2028 EPS expected to grow 34% YoY.

Impact & implications

The significant increase in capex and financing scale indicates the company is expanding capacity in advance to meet persistently strong AI server demand. As products expand from air-cooled ASIC servers to liquid-cooled ASIC and GPU server racks, and with potential additions of ASIC customers and SKUs, Wiwynn’s revenue growth is expected to accelerate further in 4Q26 and 2027. However, the consignment model will reduce recognized revenue scale, and rising R&D investment may pressure margins in some quarters; therefore, growth quality should be assessed together with gross margin, operating expense ratio, and cash flow.

Risks

• AI server demand growth weaker than expected.
• General-purpose server demand recovery slower than expected.
• Further intensification of competition in the server ODM market.
• Mass production progress of liquid-cooled ASIC and GPU AI server racks later than expected.
• Rising capex and R&D investment may pressure cash flow and short-term margins.
• Customer concentration and changes in major customers’ product cycles may cause earnings volatility.
• Goldman Sachs disclosed that it has or seeks investment banking relationships with Wiwynn, and investors should pay attention to potential conflicts of interest.

What to watch

• Whether August and September revenue declines MoM as expected, and whether 3Q26 can achieve 22% QoQ growth.
• Mass production and shipment progress of liquid-cooled ASIC servers and GPU AI server racks in 4Q26.
• Expansion of new ASIC AI server customers and SKUs.
• Capacity expansion plans in the United States, Mexico, and Malaysia, and capex execution progress.
• Ongoing impact of the shift in general-purpose servers from outright sales to consignment on revenue, gross margin, and working capital.
• Impact of R&D expense ratio and 4Q26 product mix changes on margins.
• Whether 2027-2028 revenue and EPS growth can support the 20x target P/E.