At a glance. A solid industrial quarter — Q2 revenue NT$16.6bn, EPS NT$1.12 — driven by motors and power equipment, including US data-center demand. The 800V-adjacent temptation on this call is a unit trap. 800 kW is Taiwan's revised large-user electricity threshold, not 800 V. TECO did not discuss 800 VDC, HVDC, or SST. What it did discuss is facility electrical: large motors, transformers, switchgear, busway and MEP, plus a first data-center busway order in late July and Thailand AIDC work via Danasai.
What changed this quarter
Electromechanical and power-and-energy both printed double-digit growth and remain more than 70% of the group. Power-and-energy's margin lift is what moved group gross margin.
The Malaysia busway plant took its first data-center order at the end of July, with shipments guided to late September–October. A 2.7 MW modular data-center POC in Kuala Lumpur is due to complete around the same window.
Danasai is closing at the end of August, with a modular electrical line targeted for September, and Thailand AIDC is being stood up behind a CSP customer that already uses TECO in Malaysia — starting with fibre, not rack power.
The numbers
| Q2 2026 | Value | Change |
|---|---|---|
| Revenue | NT$16.6bn (~US$527m) | +16.6% QoQ, +6.4% YoY |
| Gross margin | 25.1% | +1.6pp QoQ and YoY |
| Operating margin | 10.5% | +2.2pp QoQ, +1.0pp YoY |
| EPS | NT$1.12 (~US$0.04) | +NT$0.43 vs NT$0.69 a year ago |
First half 2026: revenue NT$30.835bn (~US$979m), +5.5% YoY; gross margin 24.4% (+0.6pp); operating margin 9.5% (+0.4pp); EPS NT$1.63, up more than 32%.
EPS also reflects fair-value gains on financial assets, not only operating profit. Management did not give a group net-income total on this call.
NVIDIA 800V read-through
TECO is a medium-voltage / facility-power name. This call is about electrifying data-center buildings, not populating an 800 VDC rack.
What is actually in the data-center print:
- US large motors. January–July orders up nearly 30% year on year. One driver is existing large HVAC customers now supplying data centers, which pulls TECO medium- and high-voltage motors. The other driver is oil-and-gas: 800–1,000 horsepower H-pump demand at least doubled. Those are motor horsepower figures, not volts.
- Power equipment into US CSPs — transformers, switchgear, large motors — plus data-center and offshore-wind contribution inside the power-and-energy group.
- Malaysia busway. First data-center application order late July, ship late September–October. Management did not identify this as NVIDIA's 1500 A DC busduct. Read it as facility busway until a voltage is named.
- Thailand AIDC via Danasai. Existing Thailand engineering, starting from fibre, a dedicated data-center subsidiary, copying the Malaysia playbook, with orders and revenue expected in 2026. Follows an international CSP that already takes TECO in Malaysia.
- 2.7 MW MDC POC in Kuala Lumpur, design done, complete around late September–October, possibly sold rather than only shown.
NVIDIA's stack still needs MV motors, transformers and switchgear on the AC side of any rectifier. That is where TECO sits. It is not a power shelf, BBU, 800 V rack, or SST name, and it did not claim to be.
Do not confuse 800 kW with 800 V. The government revision of Taiwan's large-user rule lowers the threshold to 800 kW, expanding the regulated set from about 490 sites to about 5,000. TECO's hook is ESCO work — energy audits, reporting, compressors, chillers — using the same toolkit it already sells to large industrials. Kilowatts, not volts.
Segments that moved
| Group | Q2 2026 | Change |
|---|---|---|
| Electromechanical systems | NT$7.6bn (~US$241m) | +12.9% YoY |
| Power and energy | NT$4.3bn (~US$137m) | +11.1% YoY |
| Smart energy | NT$0.9bn (~US$29m) | +21% YoY |
| Air-conditioning and smart living | — | −10.6% YoY |
Electromechanical grew on double-digit China, Taiwan and North America. Power and energy grew on data-center and offshore-wind construction; its margin is the group-margin story. Smart energy grew on automation. HVAC revenue fell because residential was cut back; commercial HVAC was up more than 20% in the first half, which is the mix management wants, and large-tonnage chiller capacity is being added at Wuxi.
Other items on the call, not 800V: a first green-power PPA with a semiconductor customer, >30 MW and >300 million kWh, revenue from end-2026; a Victoria, Australia solar-plus-storage project due to finish installation and testing in 2026Q4; Indonesia transformer capacity for US orders; TJM-series robot modules shown in July; an India light-commercial e-axle and a mining-truck powertrain prototype; a heavy-lift UAV powertrain in US agricultural and logistics trials.
Guidance
- 2H 2026 group revenue expected above the first half.
- All four groups expected up year on year in the second half. Versus the first half: electromechanical, power-and-energy and smart energy up; HVAC about flat.
- 2H gross margin about in line with the first-half average and with last year.
- Danasai consolidation at end-August; modular electrical line in September; customer visits then orders. Benefit in the second half.
- Thailand AIDC: orders and revenue in 2026.
- Malaysia busway DC order: ship late September–October. MDC POC complete in the same window.
Management Q&A
Q: What is the demand and progress on Thailand AIDC?
A: Through the acquired Danasai team, which already has engineering capability in Thailand, the first cut will be fibre-optic work, and a dedicated data-center subsidiary will copy the Malaysia playbook. Hiring and training have already started, and orders and revenue are expected in 2026.
Q: Why was Thailand chosen as the next focus?
A: It follows an important international CSP customer. After TECO's delivery capability and quality in Malaysia were recognised, the customer asked TECO to serve Thailand as well. Management said Thailand's future market potential is no smaller than Malaysia's.
Q: How large is the opportunity from Taiwan's new 800 kW large-user electricity policy?
A: The applicable set expands from about 490 sites to about 5,000, creating demand for energy audits and equipment replacement. TECO has a full ESCO offering, from inventory and filing through optimisation to swapping equipment such as air compressors and chillers, and it intends to take the experience of serving large industrials into this broader market.
Q: What is the outlook for the HVAC group after the mix shift?
A: First-half revenue fell on residential air-conditioning, but the commercial HVAC line they are focusing on grew more than 20%. Moving toward a B2B model is meant to improve gross margin and the expense ratio, and large-tonnage chiller capacity is being expanded to match demand.
Q: US large-motor orders are up nearly 30%; how much of that is data center?
A: There are two drivers. Existing large HVAC customers have begun supplying data centers, which pulls demand for TECO's medium- and high-voltage motors, and oil-and-gas recovery has at least doubled demand for 800–1,000 hp H-pump motors.
Q: What is the latest progress on the Danasai acquisition?
A: Integration is on track, and the close and consolidation are confirmed for the end of August 2026. TECO has been helping tidy the plant; a modular electrical production line is due in September, after which customer visits can release orders, with the benefit showing in the second half.
Q: What is capacity and order intake at the Malaysia busway plant?
A: The first data-center application order was received at the end of July, with shipments expected from late September to October. The plant uses AI process quality control and is described as industry-leading in quality. Besides data centers, general factory-building demand in Southeast Asia is also large.
Q: What is the POC progress on modular data centers (MDC)?
A: The 2.7 MW POC is on schedule: design is complete, the site is in Kuala Lumpur, and construction is expected to finish around late September to October. After that it will be used for customer demonstrations and might even be sold outright, which management called an important milestone.
Disclaimer
English notes on TECO Electric & Machinery's investor conference of 13 August 2026, covering Q2 2026. The call did not discuss 800 VDC. 800 kW refers to Taiwan's large-user electricity threshold; 800–1,000 hp refers to oil-and-gas motors. Figures 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.