MiTAC Corporate President Billy Ho expressed optimism for 2025, though he acknowledged the significant uncertainties ahead, including geopolitical tensions and the potential impact of a "Trump 2.0" scenario. To mitigate these risks, MiTAC is taking proactive measures to ensure resilience and adaptability in the face of potential disruptions.
Expanding beyond China: A "China+2" & "China+3" strategy
Ho revealed that MiTAC is pursuing a "China+2" and "China+3" strategy, further diversifying its operations by adding two or three additional countries beyond China. This approach is designed to navigate shifting tariff structures and mitigate risks associated with reliance on China.
MiTAC has announced plans to double its capex in 2025 compared to 2024. Although the company refrained from providing specific financial forecasts, it highlighted ongoing expansions in Vietnam and the US, alongside its "China+3" strategy, all of which are expected to drive a substantial increase in capex.
He emphasized that US President-elect Trump has recently threatened to impose new tariffs on the US's top three trading partners, adding to the uncertainty of 2025. He further noted that the rise of AI presents challenges, such as power supply constraints and evolving regulatory policies, which will require close monitoring.
Under growing pressure to diversify its operations, MiTAC has significantly expanded its global footprint. Having established a manufacturing facility in the US in the late 1990s, the company is poised for further expansion in 2024. In Asia, MiTAC is implementing a "China+2" strategy, with plans to extend this to a "China+3" approach, though specific locations remain undisclosed.
MiTAC's AI and server biz: scaling for 2025 growth
MiTAC's server business–MiTAC Computing Technology–has established a strong presence in both hyperscale and AI data centers. In the hyperscale sector, MiTAC collaborates with US partners to meet growing customer demands and is also preparing to support advancements in liquid cooling and other innovative technologies.
MiTAC's AI data center, which entered the experimental phase in 2023, will begin full-scale operations in 2024. By 2025, the company anticipates complete deployment of AI solutions to meet customer demands. MiTAC expects steady growth throughout 2024, with both quarter-over-quarter and year-over-year improvements and anticipates maintaining a stable gross margin in the fourth quarter.
Developing AI requires substantial capital, and Doris Huang, VP of the Finance Center at MiTAC, highlighted the operational turnover needed to support this initiative. Despite these demands, MiTAC is in a strong financial position, with net cash of NT$9 billion (approx. US$277.1 million) and minimal external debt. The company operates with ample internal funds and well-established credit lines for future capital raising. MiTAC is also preparing to secure medium- to long-term funding.
Rick Hwang, President of MiTAC Computing Technology, expressed confidence in the growth prospects for the server business in 2025. Both general servers and AI servers are expected to experience significant growth.
Steve Chang, President of MiTAC Digital Technology, noted that the automotive and smart retail sectors are also expected to grow in 2025. MiTAC Digital is currently preparing to list on the Emerging Stock Board (ESB) before transitioning to the Taiwan Stock Exchange.
