Advanced Power Electronics (APEC) reported a sequential uptick in the third quarter 2024 revenue, driven by demand for upgraded power supplies and cooling fans in AI servers. While these products mainly operate on low- to mid-voltage, APEC noted their average selling price (ASP) trends higher, though rising quality demands from clients are also intensifying price pressure.
At a recent briefing, APEC outlined its focus on supplying MOSFETs for AI server power supply and cooling applications. Due to the heavy power consumption of servers, their power and cooling requirements exceed those of notebooks and PCs, necessitating higher wattage. Historically, servers have utilized low- to mid-voltage products, with high-voltage segments largely monopolized by major US and European IDMs.
For MOSFETs in cooling applications, APEC stated that specifications vary per client and downstream project requirements. ASPs are generally higher to meet server-grade specifications, though increasing price sensitivity among customers is likely to weigh on future pricing.
Addressing market dynamics, APEC forecasted continued price declines for MOSFETs due to China's massive build-out of 12-inch wafer fabs, which adds pressure on mature manufacturing processes. Low-voltage products are expected to bear the brunt of these declines, while mid- to high-voltage products may see less downward pressure, with 8-inch fab efficiency still offering advantages over 12-inch for some items.
APEC suggested that some product lines may be optimized for 8-inch production, adding that industry constraints could impact growth trajectories. Without such limits, the industry may face unavoidable price pressures.
For the third quarter 2024, APEC's revenue hit NT$807 million, a 10.02% quarterly rise and a 2.23% increase year-over-year, with a gross margin of 31.82%. Cumulative revenue for the first nine months reached NT$2.131 billion, down 1.53% from a year prior.
Product revenue was led by low-voltage at 42%, followed by mid-voltage at 32%, high-voltage at 24%, and a small contribution from IGBT. In terms of applications, APEC's power management sector has historically benefited from gaming console demand, though this share declined to 49% in the third quarter 2024. Meanwhile, PC and computing segments rose to 27% of revenue, with DC products at 10%, and displays making up a minor share.
