Compal Electronics president and CEO Anthony Peter Bonadero said the company anticipates PC shipments in the first quarter of 2026 will fall 15-20% quarter-over-quarter and that Compal is accelerating a structural shift with a goal of non-PC revenue reaching 40% in 2026.
Bonadero attributed the first-quarter decline to seasonal factors, memory shortages, and rising component costs, noting that January weakness was worse than the usual 11-13% seasonal drop. In the fourth quarter of 2025, Compal raised its non-PC business share from 25% to 29%, which the company says helped gross margin improve to 5.8%. Full-year gross margin increased to 5.6% from 5.0% a year earlier.
Compal identified key non-PC products as smartphones, 5G modules, and servers, and outlined a "5+" non-PC plan covering infrastructure solutions, automotive electronics, advanced 5G communications, medical technology, and industrial sectors. Servers showed the fastest growth, with management projecting server revenue to double sequentially in the first quarter of 2026 and to exceed 10% of total revenue for the year. Compal said order visibility for the first half of 2026 is high, with momentum expected to continue into the second half. The company expects AI servers to account for 80% of server sales in 2026.
Management warned that memory price increases are likely to persist through 2026 and possibly into 2027, weighing on the broader PC market. While market research firms project a 11% contraction in the global PC market in 2026, Bonadero stated he believes Compal's PC business could be flat or grow slightly. He also said that Compal is aggressively developing its non-PC segment without diluting PC efforts, and that new product development typically takes 10-18 months.
Compal reported fourth-quarter 2025 revenue of NT$190.852 billion (approx. US$6.08 billion), up 2% quarter-over-quarter but down 1.7% year-over-year. Gross margin rose 0.1pp quarter-over-quarter to 5.8% and was up 0.8pp year-over-year. Operating margin was 1.4%. Net income after tax was NT$1.409 billion, down 28% quarter-over-quarter and 27% year-over-year, with earnings per share of NT$0.32.
For the full year 2025, revenue totaled NT$757.513 billion, down 17% from 2024. Gross margin improved 0.6pp to 5.6% while operating margin fell 0.2pp to 1.4%. Net income declined 40% to NT$6.03 billion, with EPS of NT$1.38. Compal attributed the revenue decline to global tariff policies affecting consumer markets, intensified competition, and strategic business adjustments, and said investments in automation, digitalization, and factory efficiency helped improve competitiveness and margins relative to 2024.
Article translated by Jingyue Hsiao and edited by Jack Wu
