Walsin Lihwa: AI-Driven Grid Demand Keeps Q3 Cable and Stainless Steel Business Flat

How is AI-driven power demand lifting Walsin Lihwa's cable and wire business?

According to Money UDN, Walsin Lihwa (華新麗華) General Manager Wang Hsi-chin said the rapid expansion of AI applications is fueling power demand across three fronts — data center buildout, grid upgrades, and energy infrastructure — and that this trend will keep supporting the company's cable and wire segment (E1). Wang went further in the same report, framing AI as "a key force driving global energy and infrastructure development over the next decade," and stating that power transmission and distribution systems are indispensable infrastructure for the AI era that will drive long-term demand growth for both cable and stainless steel products (E2).

What is the outlook for the cable and wire segment in Q3?

Both Money UDN and CNA carried the same guidance from Wang: "With the rapid global development of AI applications — from data center expansion and grid upgrades to energy infrastructure — power demand will continue to grow, and overall cable and wire performance in Q3 is expected to remain at Q2 levels" (E1, E11). The identical wording appearing in both outlets indicates the company is guiding to a flat, not accelerating, quarter-over-quarter trajectory for this segment.

What cost pressures and outlook does the stainless steel business face?

Per both Money UDN and CNA, Walsin Lihwa's stainless steel segment continues to face elevated raw material costs, with Wang noting that nickel and other input prices remain high in Taiwan, which is expected to keep product prices supported (E3, E13). As a result, the company expects the stainless steel segment's overall Q3 performance to be "about the same as Q2" (E3, E13) — a flat outlook driven by cost pass-through rather than volume growth.

How do resources segment dynamics in Indonesia and China factor into Q3?

According to Money UDN, the resources segment continues to be shaped by Indonesia's policy of limiting nickel mining permits, with the company expecting Indonesian nickel pig iron production, pricing, and overall operating conditions in Q3 to be "about the same as Q2" (E4). Separately, Wang attributed supply constraints in China to the country's "anti-involution" policy limiting output, which is keeping raw material prices high and supporting sell prices — a dynamic he said points to a "flat" Q3 performance for that exposure (E5).

What growth opportunity does the coolant/liquid cooling business see from data center expansion?

Money UDN reported that Walsin Lihwa's coolant business is built around a brand strategy emphasizing quality reliability and deepened customer service, with the company positioning itself within the liquid cooling systems material supply chain (E6). The company said this segment will see "continued demand growth" as data center expansion proceeds (E6) — a trajectory consistent with the data center-driven power demand story Wang described for the broader cable business (E1).

How is Europe's CBAM policy affecting pricing and when will protection benefits show up?

According to both Money UDN and CNA, Wang assessed that Europe's Carbon Border Adjustment Mechanism (CBAM) is contributing to higher product prices, and that safeguard measures reducing import quotas are expected to provide policy protection benefits — but because Q3 coincides with the European summer holiday period, those benefits will be "deferred to show up in Q4" (E7, E14). This is one of the few forward-looking, dated claims in the company's guidance, explicitly separating the current quarter from the quarter in which the policy effect is expected to materialize.

What does the SMP–Rolls Royce contract signal about strategic positioning?

Both Money UDN and CNA reported that Walsin Lihwa's subsidiary SMP has signed a long-term contract with Rolls Royce, which the company said "solidifies the strategic partnership between the two sides" and can "enhance Walsin Lihwa's long-term competitiveness in high-end alloy materials" (E8, E15). No contract value, duration, or volume figures were disclosed in either report.

What were Walsin Lihwa's first-half operating results?

According to Money UDN and CNA, Walsin Lihwa reported first-half net revenue of approximately NT$90.718 billion (907.18億元), gross operating profit of NT$6.946 billion (69.46億元), and operating income of approximately NT$1.273 billion (12.73億元). Combined after-tax net income came to NT$12.5 billion (125億元), with earnings per share of NT$2.85 (E9, E10, E16).

What this means

Taken together, the guidance reported by Money UDN and CNA describes a company whose core segments — cable and wire, stainless steel, and resources — are all being guided to flat, not growing, quarter-over-quarter performance in Q3 (E1, E3, E4, E5), even as management frames AI-driven power infrastructure demand as a multi-year growth driver (E1, E2). The one segment explicitly tied to accelerating demand, coolant/liquid cooling, is linked directly to data center buildout rather than to the flat-guided core businesses (E6). Meanwhile, a distinct policy catalyst — CBAM safeguard benefits — is explicitly described as delayed to Q4 rather than present in Q3 (E7, E14), and the SMP–Rolls Royce contract represents a long-term relationship move disclosed without quantified near-term financial impact (E8, E15). Against this backdrop, the first-half results reported — NT$90.718 billion in revenue and NT$12.5 billion in after-tax profit (E9, E10, E16) — represent the base from which the flat Q3 guidance across multiple segments is being measured.