Taiwan's largest networking PCB manufacturer, GOLD CIRCUIT ELECTRONICS LTD. (GCE, TPE:2368), established in 1981, is ramping up production to meet surging demand driven by AI advancements. The company's product portfolio includes high-end circuit boards, thick copper boards, and backplane HDI, with applications spanning servers (69%), networking equipment (15%), laptops (10%), and other fields (6%).

Rising Demand Fueled by AI

As AI technology spurs demand for servers and networking equipment, GCE, a market leader in server PCBs, is poised for strong growth. Increased layer counts in PCBs are accelerating capacity consumption, further benefiting the company. To address robust client orders, GCE's Taiwan and Suzhou plants will remain operational throughout the Lunar New Year, ensuring uninterrupted production. The company anticipates sequential revenue growth and strong gross margins in Q1 2025.

Capacity Expansion

GCE's facilities in Taiwan and China are currently operating at full capacity. The company is actively expanding production capabilities, with plans to increase its Taiwan plant's capacity by 20% in the second half of this year. The additional capacity, rolled out during Q3 and Q4, will enhance its ability to meet growing demand.

Positive Industry Outlook

According to U.S.-based analysts, GCE's role as a primary supplier of ASIC (application-specific integrated circuit) PCBs positions it for steady revenue growth. With rising AI-related demand, the layer count of universal baseboards (UBBs) is expected to increase from 20-30 layers to over 30 layers next year, driving up GCE's average selling prices (ASP) and profitability.

Asian analysts are equally optimistic, highlighting GCE's comprehensive one-stop solutions, covering everything from UBBs to OAMs (accelerator boards). With production capacity coming online at its Thailand plant, the company is better equipped to serve customer needs. Q1 2025, typically a slow season, is projected to see a 10% quarter-on-quarter revenue increase.

In light of these developments, foreign investors have raised their earnings per share (EPS) forecasts for GCE in 2025 and 2026, adjusting the target price from NT$240 to NT$290, underscoring confidence in the company's growth trajectory.