Leun Enters NVIDIA's New Platform Supply Chain, High-Value Product Mix to Rise

Leun, a connector manufacturer, is optimistic about the explosion in AI applications. Chairman Li Chun-cheng announced that in addition to its major client Amazon AWS, Leun has successfully entered the supply chain for NVIDIA's new Vera Rubin platform. With the shipment of new platform models, Leun estimates its revenue distribution for the first and second halves of this year will be approximately 4:6, with profit growth expected to outpace revenue growth.

During the annual shareholders' meeting today, Li stated that benefiting from cloud service providers (CSPs) continuing to expand AI capital expenditures, its largest client, AWS, is currently in a transition phase between old and new models in the second quarter, with a gradual shift to the new platform expected in the second half of the year.

Furthermore, Leun has entered NVIDIA's Vera Rubin supply chain, providing high-power cables and other components, with product certification progressing steadily. As new products ship, the proportion of Leun's high-value products is set to increase.

Li noted that AI-related products accounted for over 30% of revenue in the first quarter and are expected to rise to 50% in the second half, simultaneously boosting revenue and profit. Leun expects second-half performance to exceed the first half, and since AI products have higher gross margins than the average, profit growth is expected to outperform revenue growth.

To meet increasing customer demand, Leun is expanding its production capacity. Li mentioned that factories in China and Thailand are currently operating near full capacity, utilizing night shifts and overtime to meet order requirements. Leun plans to start construction of a new plant in Thailand in the fourth quarter of this year, covering approximately 50,000 to 60,000 square meters, focusing on vertical integration of AI and high-power products, with a target to begin production by the end of next year.