AI Demand Booms: Songchuan Precision's Expansion and Acquisition Pay Off with Nearly Doubled July Revenue, Hitting New High

Amid surging demand for AI and energy storage, Songchuan Precision (7788-TW), a relay manufacturer, has seen its global expansion and acquisition synergies pay off. The company announced today (10) its latest revenue figures: July revenue reached NT$986 million, surpassing the NT$900 million mark for the first time, up 19.09% month-on-month and 99.38% year-on-year. Cumulative revenue from January to July 2026 reached NT$5.103 billion, up 36.88% year-on-year.

Meanwhile, Songchuan Precision will release its latest first-half financial report on the 12th. Analysts expect the company’s profitability to shine in Q2, driven by the effect of product price increases implemented since the second quarter.

Songchuan’s high-voltage, high-current products for data center (CSP) inverters, server power supplies, and uninterruptible power systems (UPS) began significant volume shipments starting in the second half of 2025. This has not only driven rapid revenue growth and consecutive record highs but also increased the product category’s revenue share from 12% a year ago to 17%—a five-percentage-point rise—indicating a clear growth trajectory.

Moreover, Songchuan’s revenue has hit a record high for three consecutive quarters. Statistical data show that revenue from high-voltage, high-current products for data center inverters, server power, and UPS reached NT$700 million in the first half of 2026, accounting for 17% of total revenue—an 80% increase from NT$388 million in the same period of 2025.

Songchuan Precision set new revenue records in both Q1 and Q2 of 2026. Cumulative revenue from January to June 2026 reached NT$4.117 billion, up 27.32% year-on-year. In terms of revenue mix, power control (AIDC applications) accounted for 17%, while electric vehicles and EV charging applications had the highest share at 40%. Automotive electronics accounted for 20%, and home appliance applications remained stable 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 to accelerate 'Made in America' localization, Songchuan Precision, a key relay supplier for AI data centers, may revise its full-year capital expenditure upward again to accelerate capacity expansion at its Mexico plant, responding to the growing demand for a localized supply chain ecosystem.

Songchuan Precision reported record-high revenue and profits in its Q1 2026 financials, with net profit reaching NT$178 million, up 59.83% quarter-on-quarter and 22.48% year-on-year. Earnings per share reached NT$2.22. With market demand for AI servers and related applications surging, 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 amount does not include capacity needs from key power supply customers’ expansions. The company is closely monitoring its major customers’ development progress and rising demand trends.

Originally established to serve the automotive electronics supply chain for U.S. EV manufacturers’ Texas 'Gigafactories,' Songchuan Precision’s Mexico plant may see its annual capital expenditure revised upward again, as management estimates strong demand from the power market and accelerated customer expansion, requiring adjustments to match customer factory setup timelines and production needs.

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

As major global cloud service providers continue to increase capital spending, the AI race has turned 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 Precision’s operations are on an upward trajectory. Combined with the consolidation of former Tai-Hsing Electronics’ revenue, monthly revenue continues to set new records, surpassing the NT$800 million mark for the first time. The company reported June 2026 revenue of NT$828 million, up 13.35% month-on-month and 65.66% year-on-year. In addition to actively investing in new capacity, Songchuan notified customers of relay product price adjustments in April, with benefits gradually contributing to revenue and profit starting in Q2.

Songchuan Precision’s Q2 revenue reached NT$2.26 billion, another record high, up 21.68% quarter-on-quarter and 40.28% year-on-year. Cumulative revenue for January to June reached NT$4.116 billion, up 27.32% year-on-year.