Gross Margin of 87% Surpasses TSMC! Chuan-Ho Rises to 'NT$10,000 Stock' on 'Two Iron Bars'—Chairman Lin Tsung-Chi Transforms from Furniture Apprentice to Taiwan's Richest

Chuan-Ho Technology, a leading manufacturer of server rack slides, has seen its performance and stock price soar amid the AI boom. In early August, its share price broke the NT$10,000 mark for the first time, making it the third 'NT$10,000 stock' in Taiwan's stock market history. The company's founder, Lin Tsung-Chi, briefly surpassed Hon Hai Chairman Terry Gou in net worth, becoming Taiwan’s richest person and sparking widespread discussion.

While some media outlets dubbed Lin Tsung-Chi a 'blue-collar to billionaire' story, his daughter and current Chuan-Ho CEO, Lin Shu-Chen, pushed back, emphasizing that Chuan-Ho has been an electronic components stock since its IPO in 2005.

Chuan-Ho has broken free from traditional OEM thinking to build a high-margin innovation model. Lin Shu-Chen noted that while many view slide rails as mere 'two iron bars,' Chuan-Ho has maintained gross margins above 50% since its IPO—comparable to the IC design industry. Most notably, its Q2 2026 gross margin surged to 87.42%, far exceeding TSMC’s 67.7%, drawing significant attention from institutional investors.

Lin emphasized that while Taiwan’s manufacturing model often focuses on price (P) and quantity (Q), Chuan-Ho has taken a different path. For example, server racks were once so heavy that installing slide rails required 4–5 professionals. But through continuous innovation, Chuan-Ho’s rails now allow non-specialists to install them easily—one person, one rack. These incremental innovations have built Chuan-Ho’s competitive edge.

Lin stressed that a slide rail contains hundreds of precision components. At the core of Chuan-Ho’s success is precision manufacturing, extended through relentless R&D. The company has amassed over 3,600 patents, creating a formidable moat. This achievement stems from founder Lin Tsung-Chi’s unwavering commitment to quality and innovation.

Lin Tsung-Chi began as a furniture apprentice, learning drawer-making before even finishing elementary school. His extreme attention to quality—discarding any flawed product—earned deep customer trust.

He entered the door handle and hinge business in 1977 and founded Chuan-Ho in Lukang, Kaohsiung, in 1986, initially as a traditional metal workshop making furniture slides. A pivotal moment came in 2000, when a major furniture client demanded a 30% price cut. Lin refused, triggering a temporary crisis—but also prompting his decisive shift toward tech applications like servers and networking equipment, laying the foundation for today’s Chuan-Ho.

At an online earnings call in early August, Chuan-Ho’s Executive VP and spokesperson Wang Chun-Chiang—Lin Tsung-Chi’s son-in-law and a key driver of the transformation—declared, 'Chuan-Ho is the purest AI stock in Taiwan’s market.' Server-related revenue now accounts for over 90% of total sales, with extremely high market share.

Wang explained that slide rails are the 'safety component' of AI server racks. While a single rail represents a small fraction of the total rack cost, the rack itself can cost over NT$100 million. The rail must bear immense weight, and its engineering tolerances and precision are extremely demanding. Through years of strategic investment and patent accumulation, nearly every CSP (Cloud Service Provider) and ODM (Original Design Manufacturer) specifies Chuan-Ho’s rails.

Lin Shu-Chen added, 'An AI server is so expensive—what if the rack fails and causes a shutdown? The financial loss would be enormous. How could anyone risk using inferior parts? When customers buy King Slide rails, they’re not just buying a product—they’re buying insurance.' By perfecting an unassuming component, Lin Tsung-Chi has risen to become Taiwan’s richest person. With 'two iron bars,' he has written Chuan-Ho’s AI legend.