AI Server Power Management Needs Rising, Taiwanese Wire Rack Manufacturers' Order Visibility Increases

According to reports from the South Korean media digitimes, AI data centers are accelerating the shift to 800V high-voltage direct current (HVDC) power architectures, driving up demand for power semiconductors. Taiwanese lead frame manufacturers Xingde Industry and Jielun Technology have seen synchronized growth in shipments, with market expectations that both companies will achieve double-digit revenue growth in 2026.

The lead frame suppliers indicated that over the past few months, the demand for AI server power management systems has noticeably heated up, with orders from international IDM giants such as Infineon and STMicroelectronics continuously expanding. In the past years, the automotive industry has been the main driver of lead frame demand, and suppliers generally estimate that 2026 is likely to mark a turning point for server demand to take over from the automotive segment.

The core reason is that the power modules of AI servers are highly similar to those of automotive power modules in terms of high-power endurance, thermal design, and reliability requirements. The technology and experience accumulated by manufacturers in automotive-grade products are becoming the foundation for entering the AI server power management market.

Xingde Industry pointed out that the rebound of AI power management orders has exceeded short-term expectations. The company's high-power lead frame products for HVDC applications have moved from the R&D phase into mass production, with over 40 customized projects currently underway.

Looking at the revenue structure, AI-related revenue from Xingde Industry in 2025 accounted for only about 1% of total revenue, but it is expected to rise to 6% by the first quarter of 2026. The company also anticipates that the revenue contribution from HVDC-related projects will begin to accelerate from the second half of 2026.

Jielun Technology has shown a noticeable improvement in capacity utilization and annual targets. Supported by the pickup in the automotive market and the demand for AI servers, the company's capacity utilization rate has rebounded to 70%-75%, and it is expected that revenues in 2026 will grow quarter by quarter, with the goal of reaching NT$6 billion for the year likely to be achieved.

Jielun Technology's AI-related revenue in 2025 accounted for approximately 5% to 7% of total revenue, and the market expects this proportion to exceed 10% by 2027. The company is aggressively expanding into the AI power management field by leveraging the integration of stamping and etching processes, while maintaining a pace of developing 40-50 new products annually.

In terms of technology, Jielun Technology is transferring the double-sided cooling and thermal dissipation technologies previously used for automotive modules to AI server products. The company stated that related products received positive feedback during the customer evaluation phase.

Lead frame manufacturers generally believe that the rapid expansion of AI demand, coupled with long-term partnership relations with IDM and OSAT clients, is significantly enhancing the visibility of orders. For manufacturers with a higher proportion of automotive business, the increased penetration rate of ADAS and the trend of automotive electrification are also considered to be significant forces driving the recovery of automotive semiconductor demand.

Supply chain assessments suggest that the inventory correction phase has essentially concluded, and as 2026 progresses into the second half, the overall momentum for shipments is expected to further strengthen.