At a glance. Lite-On showed a full megawatt-class power and liquid-cooling stack at OCP 2025, including an 800V DC power rack — then told investors the 800V product waits for a customer platform in 2027, while 400V carries 2026. The binding constraint this quarter was not demand but its own power capacity.
What changed this quarter
The 800V/400V split became explicit. At OCP 2025 Lite-On presented an 800V DC Power Rack, BBU, a 2.1MW in-row CDU, a 280kW in-rack CDU, and a 140kW liquid-to-air sidecar. But on timing, management separated them: 400V racks sample in 2025Q4 and reach volume in 2026; the 800V rack is matched to a customer's Xyber platform and expected in 2027.
Capacity, not orders, capped the quarter. Power product capacity was insufficient in Q3 and some orders slipped to Q4. Lite-On had already roughly doubled capacity across Vietnam, Kaohsiung, and Texas, and said it still could not fully meet customer demand.
The AI target was raised from 15% to 20% of full-year revenue, with 2026 to go far beyond that.
Financing was arranged for the build-out: a US$200m capital increase into the Vietnam subsidiary and a domestic unsecured convertible bond of up to NT$12bn.
The numbers
| Q3 2025 | Value | Change |
|---|---|---|
| Revenue | NT$44.9bn (~US$1.43bn) | +22% YoY, +11% QoQ |
| Gross margin | 25.0% | +2.9pp QoQ |
| Operating margin | 10.4% | +1.2pp QoQ |
| Net income | NT$4.65bn (~US$148m) | +47% QoQ |
| EPS | NT$2.05 (~US$0.065) | — |
Nine months: revenue NT$121.7bn (+23%), gross margin 23.3%, operating margin 9.9%, net income NT$11.3bn (+27%), EPS NT$4.94.
Two accounting notes matter. The NT$400m of US tariffs Lite-On had prepaid for customers in Q2 was fully recovered in Q3, inflating both revenue and SG&A; from Q4 it is handled as a pass-through, so margin and expense ratios normalise. And the Q3 tax rate was unusually low because of a one-off resolution with the tax authority.
Capex was guided to NT$6–7bn for 2025, up about 25%, and not below NT$7bn in 2026.
NVIDIA 800V read-through
The value of this call is that it dates 800V before the architecture was public, and the answer was conservative.
- 800V Power Rack: 2027, gated on a customer platform rather than Lite-On's own readiness.
- 400V Power Rack: samples 2025Q4, volume 2026 — this is the revenue in between.
- The megawatt stack at OCP shows Lite-On intends to sell power and cooling as one integrated block, not as parts.
Two supporting details are load-bearing for the 800V thesis:
BBU capacity for 2026 was already fully booked by customers. In a 2027 architecture that treats storage as mandatory, a sold-out storage line a year ahead is a meaningful signal.
DC-DC modules were still not shipping. Development continued with a semiconductor partner to avoid IP risk, with a customer demo targeted for the following year. That is the one block of the 800 VDC rack Lite-On did not yet have.
Segments that moved
Cloud and IoT was 48% of Q3 revenue and grew 28% sequentially, with AI high-end power shipments up close to 40%. Within that segment, AI products were close to half of revenue — a clarification management had to make after the figure was misread as a share of the whole company.
IT and consumer electronics was 36% and grew sequentially on high-end IT power, LEO satellite, and smart input devices.
Optoelectronics was 16%, stable on Mini LED and invisible-light applications despite structural weakness in motorcycle electronics.
Two non-AI positions are stronger than the group profile suggests: Lite-On is the largest LEO satellite power supplier globally at close to 60% share, and it is the only vendor supplying all three major games console brands.
Guidance
- Q4 2025: core businesses to grow both sequentially and year on year, with deferred Q3 orders shipping as capacity frees up.
- 2026: optimistic, with Q4 2025 as the run-rate reference and AI revenue share far above 20%.
- Medium term: double-digit revenue and profit growth, operating margin held at 10%, with margin gains recycled into R&D. R&D is to rise from 5–5.5% of revenue toward 6%.
Management Q&A
Q: Was the NT$400m tariff prepayment from Q2 fully reversed in Q3 and reflected in gross margin?
A: Yes — the tariff issue was settled with customers and fully reversed. The company had prepaid the duty, the reversal came through as a higher selling price, and because the tariff sat in SG&A both gross margin and SG&A rose together. From Q4 the arrangement is a pass-through so those ratios return to a normal run-rate, and operating profit was unaffected either way.
Q: Why was Q3 operating expense high, and what is R&D as a share of revenue?
A: Part of the OpEx increase was the tariff itself. The long-term aim is R&D at 6% of revenue; at Q3's scale it was about 5–5.5%. The policy is to lift gross margin and recycle the extra into R&D while holding operating margin at about 10%.
Q: Will Q4 be hit by seasonality?
A: AI products are less seasonal than consumer electronics. With a higher share of high-value AI products, Q4 is expected to keep last year's growth tempo, and core businesses should grow both sequentially and year on year.
Q: What is the NT$12bn convertible bond for?
A: The proceeds are meant to strengthen future core-business development, accelerate overseas expansion, and add capital-market liquidity.
Q: What is the early view on 2026?
A: As long as the AI trend holds, management sees no reason to be pessimistic. Q4 2025 is the run-rate reference for 2026, and the company expects sequential and year-on-year growth.
Q: What is the capex plan for this year and next?
A: 2025 capex is estimated at about NT$6–7bn, at least 25% above last year. 2026, with overseas expansion, is expected to be no lower than NT$7bn.
Q: Do high-end AI power plus BBU already account for nearly half of company revenue?
A: No — that is nearly half of Cloud and IoT revenue, from products such as Power Shelf and BBU, not half of the whole company.
Q: Was the 2025 AI revenue-share target raised, and did Q3 power-capacity shortages matter?
A: The full-year AI share target was raised from 15% to 20%, and 2026 will be well above that. Q3 shipments were genuinely constrained by power capacity, with some orders pushed to Q4, and added capacity still cannot fully meet customer demand.
Q: What is the 2025 AI-related revenue mix by product?
A: Most of it is power products: PSU and Power Shelf about 80%, BBU about 15–20%.
Q: When do 400V and 800V power racks ship?
A: 400V samples go to customers in small volume in 2025Q4, with mass production in 2026. 800V follows a customer's new platform and is expected in 2027.
Q: What is Lite-On's edge as more competitors enter the power market?
A: Lite-On has been in power for more than forty years and is the world's second-largest supplier. The market is large enough to attract new entrants, including from China and from infrastructure names, but management is not overly worried as long as its own core capability holds.
Q: What is the 2026 outlook for liquid cooling, and how are the programmes progressing?
A: An enterprise customer's CDU enters small-scale trial production in 2025Q4, with shipments from 2026Q1. These are customised to customer systems, so the revenue share is still small; the company will keep building capability and share from here.
Q: What is the progress on DC-DC modules?
A: There are no shipments yet, but development never stopped. To avoid IP risk, Lite-On is co-developing new technology with a major semiconductor company and may be able to show a product to customers next year.
Q: What is the outlook for non-AI businesses — IT, consumer electronics and optoelectronics?
A: Those lines are also growing year on year. The drivers are LEO-satellite power at close to 60% share, console power into all three major brands, Mini LED expansion in optoelectronics, and high-end industrial PC power.
Q: Why was the Q3 tax rate low?
A: There was a one-off tax benefit after the tax authority accepted Lite-On's treatment of certain expenses. The Q4 tax rate returns to a normal level.
Disclaimer
English notes on Lite-On's investor conference of 29 October 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.