At a glance. The baseline for everything that followed. In mid-2025, AI was only 15–16% of Lite-On's revenue, 800V HVDC was a Computex demonstration rather than a product, and the concrete power-rack roadmap was a 500kW unit for Q4 2025 with a 1MW version not due until 2027.
What changed this quarter
All three segments grew together year on year and sequentially — the first time in the recent cycle — pulling group revenue back onto a growth track.
A currency and tariff drag obscured the operating result. A sharp appreciation in the New Taiwan dollar cost roughly 4% of revenue and 0.2 and 0.5 percentage points of gross and operating margin by management's estimate. Separately, Lite-On prepaid about NT$400m of US import tariffs on BBU products shipped directly to end customers, which landed in operating expense before later recovery.
The power-rack roadmap was given specifics for the first time: a first-generation 500kW rack entering small-scale production in 2025Q4, built in Taiwan, with a 1MW successor due in 2026Q4 and volume in 2027.
The numbers
| Q2 2025 | Value | Change |
|---|---|---|
| Revenue | NT$40.4bn (~US$1.28bn) | +21% YoY, +11% QoQ |
| Gross margin | 22.1% | — |
| Operating margin | 9.2% | — |
| Net income | NT$3.16bn (~US$100m) | — |
| EPS | NT$1.39 (~US$0.044) | — |
First half 2025: revenue NT$76.8bn (+24%), gross margin 22.3%, operating margin 9.6%, net income NT$6.6bn (+20%), EPS NT$2.89.
Operating expense rose 27% year on year, split between the tariff prepayment and genuine R&D growth of nearly 20%, reaching 5.2% of revenue. Cash conversion cycle improved 12 days. Net cash was NT$52.6bn after roughly NT$8bn spent on buybacks and dividends. A Q2 dividend of NT$2 was declared and 24,219 lots of treasury stock retired.
NVIDIA 800V read-through
Six months before NVIDIA published the 800 VDC whitepaper, Lite-On's position was a technology demonstration: 800V HVDC alongside SiC and GaN shown at Computex, framed as helping customers build energy-efficient AI data centers. No customer, no date, no revenue.
What was actually moving:
- BBU and 33kW Power Shelf were the demand drivers.
- 72kW Power Shelf, a side power rack, and liquid-to-air cooling were in final customer validation for second-half contribution.
- A 120kW CDU was scheduled to begin shipping in 2025Q4, with liquid cooling targeted at 5% of total revenue in 2026.
The gap between the demo and the roadmap is the useful part of this memo. Anyone dating Lite-On's 800V exposure to 2025 is dating a trade-show booth; the first rack in production was 500kW at conventional voltage.
Segments that moved
Cloud and IoT was NT$16.7bn, 41% of sales, up 37% year on year, with new-generation cloud, AI server power, and storage management products up around 50%. Operating profit rose 30%.
IT and consumer electronics was NT$16.1bn, 40% of sales, up 16% on high-end IT power, LEO satellite, console power, and smart input devices — but operating profit rose only 3%, held back by currency and by the learning curve of moving production from China to Vietnam.
Optoelectronics was NT$7.6bn, 19% of sales, up 5%, with operating profit up 42% on Mini LED and invisible-light applications.
Guidance
- Q3 2025: core businesses to grow sequentially and year on year, led by AI power management, high-end optocouplers recovering in new energy and industrial control, and LEO satellite power. Currency remained the main risk at an estimated 10% year-on-year headwind.
- Full-year 2025: AI revenue share of 15–16% in the first half, with a stretch target of 20% for the year.
- Capacity: expansion completing in Q3 — three new BBU/PSU lines in Taiwan and four in Texas, with Vietnam absorbing automotive and consumer production relocated from China.
Management Q&A
Q: Why did Q2 gross margin and operating margin fall sequentially?
A: Two main causes: a sharp TWD appreciation that hit revenue and margins, and higher operating expense from about NT$400m of BBU tariffs prepaid for US-bound shipments, plus continued R&D. Mix also shifted toward BBU, which carries a lower gross margin than PSU.
Q: What new capacity comes on in Q3?
A: Expansion is due to finish in Q3: three BBU/PSU lines in Taiwan and four in Texas. Vietnam is mainly taking automotive and consumer electronics transferred from China.
Q: What is the 2026 revenue target for liquid cooling?
A: The aim is about 5% of company revenue. The first product, a 120kW CDU, is expected to start shipping in 2025Q4.
Q: What are the details of the tariff prepayment for customers?
A: It applies mainly to BBU products shipped directly to US end customers. The amount is about NT$400m, booked in operating expense first and recovered from customers later, so the quarter's reported figures move but the cost is ultimately passed through.
Q: When does the 72kW Power Shelf ship?
A: The product is ready and is expected to start shipping in 2025Q4.
Q: What was the product mix of first-half 2025 AI-related revenue?
A: Within the roughly 15–16% AI share, PSU is still about 80% and BBU about 10–15%.
Q: Why was Q2 operating margin in IT and consumer electronics so low?
A: It is unrelated to tariffs. The causes are FX and the transfer of capacity from China to Vietnam, which brought a learning curve, training and equipment-installation costs. Those costs should fall in the second half as the Vietnam plants mature.
Q: What is the Power Rack product plan?
A: The first version is 500kW, entering small-scale production in 2025Q4, initially in Taiwan. The next-generation 1MW product is expected to launch in 2026Q4 and enter volume in 2027.
Q: How does the company handle FX swings?
A: Besides financial hedges, management stresses technology and cost competitiveness. Customers understand the FX situation and have not pressed hard for price cuts. The FX impact cited on the call is translating USD sales into TWD; non-operating FX gains still showed in the quarter.
Q: Can next year's AI revenue share reach 25% — this year's 20% plus 5% from cooling?
A: Management said the view can be more optimistic than that. The shift toward system solutions and high-ASP products such as Power Rack should lift contribution by more than a linear share gain.
Disclaimer
English notes on Lite-On's investor conference of 30 July 2025. Figures and statements are as presented by management and have not been independently verified. USD equivalents are approximate at about NT$31.5 to the dollar. For reference only; not investment advice.