At a glance. Lite-On's Q2 2026 investor conference — Taiwan's equivalent of a US earnings call — produced record profit and, more usefully, the first hard calendar for an 800V HVDC power rack from a company on NVIDIA's official partner list: samples in August, small-volume production in November 2026, ramp in 2027Q1.
What changed this quarter
Three things moved that had not been settled before.
The 800V rack got a date. Previous calls put 800V somewhere in 2027 with no specifics. This one gave the full sequence: sample testing in August 2026, a roughly 13-week test cycle, small-volume production in November 2026, and larger volume in 2027Q1. Management added that more than one customer is pushing the specification and Lite-On is working closely with the one furthest along.
Two new cloud customers started taking product. Lite-On had already been designed in at every major North American hyperscaler; it has now begun shipping power supplies and racks to two additional CSPs. Volumes are small, but next-generation development with both is underway.
Capex was raised mid-year, from NT$13bn to NT$18bn (about US$570m), including a new Texas plant. Management framed this as the peak year rather than a new run rate.
The numbers
| Q2 2026 | Value | Change |
|---|---|---|
| Revenue | NT$52.7bn (~US$1.7bn) | +30% YoY, +21% QoQ |
| Gross margin | 27.2% | +5.1pp YoY |
| Operating margin | 15.6% | +6.3pp YoY |
| Net income | NT$7.1bn (~US$225m) | +126% YoY |
| EPS | NT$3.14 (~US$0.10) | Record |
First half 2026: revenue NT$96.1bn (~US$3.1bn), +25% YoY; gross margin 24.7%; operating margin 12.8%; net income NT$10.9bn; EPS NT$4.8, +66%.
The Q2 margin is flattered. Some high-end cloud products slipped out of Q1 into Q2, and Q1 carried an inventory write-down that lowered the base. Management said the 24.7% first-half average is the sounder reference and guided the full year to about 25%.
A Q2 cash dividend of NT$2.5 per share was approved.
NVIDIA 800V read-through
Lite-On is the rack-level integrator in this supply chain, so its schedule effectively sets the clock for the Taiwan components feeding it.
Beyond the rack date, three items matter:
- 110kW Power Shelf and BBU enter qualification alongside the HVDC rack in 2H 2026.
- DC-DC bricks are being built out through the Nanjing Nengli Xin acquisition, explicitly to match future HVDC architectures. This is the stage NVIDIA's whitepaper assigns to the 64:1 LLC converter beside the GPU.
- BBU may become standard equipment. It is already 20–25% of cloud revenue, and management expects that share to rise once HVDC racks are mainstream, because the storage requirement is written into the architecture rather than optional.
Liquid cooling is no longer a promise: the 120kW CDU and Sidecar entered volume production during Q2 and ramp through the second half.
Segments that moved
Cloud and IoT reached 55% of sales, up from 32% two years ago, with cloud computing up more than 70% year on year. This is now the majority of the company.
IT and consumer electronics is the drag, and management said conditions are unchanged or slightly worse than expected. Lite-On is holding revenue flat by raising prices rather than chasing volume.
Optoelectronics is being repositioned around the Denselight stake rather than legacy couplers.
Guidance
- Cloud computing revenue growth of over 70% for the full year; AI-related products above 30% of the mix.
- Full-year gross margin target of about 25%, using 24.7% rather than 27.2% as the base.
- Capex of NT$18bn, with subsequent years not expected to exceed it.
- Non-China capacity above 60% by end-2026, 70% in 2027.
- A long-term target of US$1bn in annual revenue per major cloud customer, potentially reachable within two years for the newest accounts.
Management Q&A
Q: Why did Q2 2026 gross margin jump to 27.2%, and can that level hold in the second half?
A: Q2 was flattered by mix — some high-end cloud products that should have shipped in Q1 slipped into Q2 — and by a Q1 inventory write-down that pulled the comparison base down. Management said the 24.7% first-half average is the sounder reference and that the full-year target is about 25%. Material inflation and mix are still variables in the second half, but the company will keep working the margin up.
Q: What is the extra capex from NT$13bn to NT$18bn for, will it keep rising, and does it affect the dividend?
A: The raised NT$18bn already includes the Texas plant. About 30% is land and buildings and 70% is production, R&D and automation equipment, especially high-power test kit for the new products. This is the peak year for capacity and equipment, later years are not expected to exceed it, and this year's capex and depreciation are described as having limited financial impact.
Q: How is the company handling second-half shortages and price increases on key components?
A: Lite-On did strategic stocking in Q1 and Q2 with customers, who provided subsidies or guarantees against the inventory risk, and key components for the second half are already in hand. Cost increases are largely passed through, so material inflation and shortages are not expected to block second-half growth.
Q: What is the progress with new CSP customers?
A: Shipments have started to two additional North American CSPs, covering power supplies used on both ASIC and GPU platforms plus racks. Volumes are still small; next-generation products are already in development, and the long-term aim is US$1bn of annual revenue per major account, which could be reached within two years if the new products ramp smoothly.
Q: Why invest in Singapore's Denselight?
A: Denselight is a 20-year-old IDM with complete indium-phosphide epitaxy and process capability, which Lite-On wants to pair with its own back-end packaging for 1.6T/3.2T optical engines and CPO. It is a pure Singapore company with R&D and manufacturing in Singapore, so the supply chain sits outside China, and AI data-center optics is the commercial case. Revenue contribution at Lite-On is expected to show more clearly in 2027–2028.
Q: What is the 800V HVDC power-rack shipment schedule?
A: Sample testing is planned for August 2026, with a roughly 13-week test cycle. If that goes smoothly, small-volume production can start in November 2026, with larger volume in 2027Q1. More than one customer is driving the specification; Lite-On is working most closely with the one furthest along.
Q: How does management see IT and consumer electronics in the second half?
A: The market has not improved and may be slightly worse than earlier expected. Lite-On is less exposed than the market as a whole because it is raising selling prices to offset volume declines, so second-half revenue in this line is expected to hold flat.
Q: What is the full-year cloud-computing growth outlook, and how does BBU grow within it?
A: The full-year cloud growth target of over 70% is intact after first-half growth close to double. BBU tracks the same trend and is about 20–25% of cloud revenue; once HVDC power racks become mainstream, BBU may become standard equipment and volumes could rise further.
Disclaimer
English notes on Lite-On's investor conference of 31 July 2026. Figures and statements are as presented by management and have not been independently verified. USD equivalents are approximate, converted at about NT$31.5 to the dollar, and are for orientation only. For reference only; not investment advice.