AI Demand Booms: Songchuan's AI DC Relay Products Surge 80% in Revenue, Share Rises to 17%

With strong AI demand, Songchuan Precision (7788-TW), a relay manufacturer, has seen significant volume increases starting in the second half of 2025 for high-voltage, high-current products used in data center inverters, server power supplies, and uninterruptible power systems (UPS). This has not only driven Songchuan’s revenue to rapid growth and consecutive record highs, but also increased the revenue share of these product applications from 12% a year earlier to 17%, a substantial rise of 5 percentage points. The growth momentum is clearly evident.

Meanwhile, Songchuan’s revenue has set new historical highs for three consecutive quarters. According to statistical data, the shipment value of high-voltage, high-current products for data center inverters, server power supplies, and UPS reached a 17% share of total revenue in the first half of 2026, amounting to NT$700 million—up 80% from NT$388 million in the same period of 2025.

Songchuan Precision achieved record-high revenues in both the first and second quarters of this year. From January to June 2026, its revenue totaled NT$4.117 billion, up 27.32% year-on-year. In terms of revenue distribution, power control (AIDC applications) accounted for 17%, while electric vehicle and EV charging applications had the highest share at 40%; automotive electronics accounted for 20%, and home appliance applications remained steady at 8%.

With Wistron (3231-TW) commencing production at its D1 plant in Fort Worth, Texas, and major Taiwanese power supply manufacturers actively investing and expanding in Texas, the 'Made in USA' initiative is accelerating local deployment. As local U.S. demand is expected to grow rapidly, Songchuan, a key supplier of AI data center relays, may revise its full-year capital expenditure upward again to accelerate capacity expansion at its Mexico plant, in response to the need to build a supply chain ecosystem.

Songchuan Precision reported record-high revenue and profits in its first-quarter 2026 financial results. Net profit after tax reached NT$178 million, up 59.83% quarter-on-quarter and 22.48% year-on-year, with earnings per share reaching NT$2.22. With market demand for applications including AI servers growing substantially, Songchuan is accelerating investment in new production capacity, planning to invest over NT$400 million in new facilities in Mexico and Vietnam this year. However, this expenditure does not yet include the full capacity demand following expansion by key power supply customers. Songchuan stated it is closely monitoring the production progress and demand trends of key customers.

Originally established to serve the automotive electronics supply chain for U.S. EV manufacturers’ Texas 'Gigafactories', Songchuan’s Mexico plant may see further upward revisions to annual capital expenditure to meet the production timelines and demand from power supply manufacturers, given the massive market demand and accelerated customer expansion, according to Songchuan executives.

Songchuan Precision completed expansions at its Chiayi, Taiwan, and Vietnam alliance plants at the beginning of 2026 and is continuing to add new production capacity in Mexico and Vietnam. Its capital expenditure plan for this year has already been revised upward to over NT$400 million. To further integrate into the ecosystem of Taiwan’s power supply manufacturers, Songchuan plans to further expand its Mexico plant, which still has 50% unused production capacity, in line with key customers’ demand and production schedules.

Global cloud service providers continue to expand capital expenditures, turning the AI race into an arms race. Taiwan’s Lite-On (2301-TW) and Delta Electronics (2308-TW) are accelerating plans to acquire land in Texas and expand power supply capacity with capital expenditures of NT$40–50 billion.

Songchuan’s operations are on an upward trajectory. Combined with the consolidation of former Tai Hsing Electronics’ revenue, its monthly revenue continues to set new highs, surpassing the NT$800 million mark for the first time. Songchuan Precision announced June 2026 revenue of NT$828 million, up 13.35% month-on-month and 65.66% year-on-year. In addition to Songchuan’s active investment in new capacity, the company notified customers of price increases for relay products in April, with the benefits gradually contributing to revenue and profitability starting in the second quarter.

Songchuan Precision reported record-high second-quarter revenue of NT$2.26 billion, up 21.68% quarter-on-quarter and 40.28% year-on-year. Revenue for January to June reached NT$4.116 billion, up 27.32% year-on-year.

Regarding the impact of price increases, May 2026 revenue reached NT$731 million, another record high, up 4% year-on-year. The company’s self-calculated monthly net profit after tax was NT$102 million, up 2.61 times year-on-year, with monthly earnings per share at NT$1.27—clearly demonstrating the benefits of expanded production economies of scale and cost-reflective pricing. Starting in the second half, Songchuan will also see profitability benefits from new products and new part numbers developed for major AIDC power supply manufacturers, including DC800V relays.