Advantech Reports Stable Order Intake and Pricing Benefits, Expects Double-Digit Revenue Growth in Second Half with Margin Recovery

Industrial computer manufacturer Advantech (6166-TW) held its earnings briefing today (4th). CEO Yi-Tun Huang stated that the company's book-to-bill (BB) ratio reached 1.5 in the first half. Order momentum remains stable for the second half, and with the benefits of price increases, revenue is expected to achieve double-digit year-over-year growth, while gross margins are also expected to rebound.

Huang noted that performance in the U.S. was strong in the first half, driven by large ODMs, medical applications, gaming, and emerging robotics projects—all contributing to growth. In Europe, medical projects performed well, rail transportation showed demand, and there were short-term and urgent orders emerging in the defense sector.

In the Asia-Pacific region, the main drivers are semiconductor equipment and supply chain demand. Beyond Singapore, Taiwan, South Korea, and Japan, Advantech has observed rapid growth in China’s semiconductor sector in the second half. Additionally, new energy-related project orders in China are expected to gradually ramp up.

Huang stated that the BB ratio reached 1.5 in the first half, and current trends suggest order momentum will continue into the second half. The company aims to maintain a mid-to-long-term BB ratio of 1.2–1.3. Advantech remains optimistic about the expansion of edge AI applications beyond mature areas like autonomous vehicles and security surveillance into healthcare, robotics, transportation, semiconductors, automation, and new energy sectors.

Regarding rising component costs, Huang said the company began passing on cost increases to customers starting in Q2, with most clients gradually accepting them. However, retail and government tender clients face fixed budgets, making cost pass-through more difficult. A 10% price increase is generally acceptable, but at 20%, clients face significant pressure, requiring negotiation.

On component availability, Huang believes CPU/GPU lead times remain long, but supply is stable due to long-term partnerships with key suppliers such as Intel and NVIDIA. Memory sourcing employs a multi-supplier strategy to ensure supply continuity. High-end fiberglass cloth for PCBs remains tight, posing an ongoing challenge.