Ennoconn, a Taiwan-based industrial PC (IPC) vendor, said on June 1 at a forum in Taipei that its physical AI business is expected to exceed NT$10 billion (US$318.93 million) in 2026, as it deepens ties with Austria-based smart IoT solutions supplier Kontron and expands commercialization. The company said the partnership could generate an additional NT$10 billion in synergies by 2028.
From proof-of-concept to mass production
The forum, which showcased the convergence of physical AI and the Ennoconn-Kontron partnership, brought together Ennoconn chairman Chu Fu-Chuan and Kontron CEO Hannes Niederhauser, along with representatives from Intel and Google, to discuss the commercialization and market rollout of physical AI.
Ennoconn president Tsai Neng-Chi said that the company's physical AI-related business will break through NT$10 billion in 2026, and that these applications are no longer proof-of-concept (POC) projects but revenue-generating deployments now entering mass production.
A $120 billion market in the making
Tsai said the global physical AI market is forecast to grow from US$5.8 billion in 2025 to more than US$120 billion by 2035, representing a compound annual growth rate (CAGR) of more than 35% and a 20-fold expansion over 10 years. He noted that this trajectory far exceeds the double-digit growth pace the market has been used to.
Tsai described physical AI as AI systems capable of perceiving, understanding, deciding and acting, enabling them to carry out tasks autonomously in the real world rather than remaining limited to cloud computing or conversational applications. Ennoconn defines the technology as systems that can see, hear, think and act, and sees physical AI as the next core driver of industrial transformation after generative AI and agentic AI.
Four stages, one direction
From a technology development perspective, Ennoconn has made substantial efforts to grow its presence in the IPC field since 2011, moving through three stages: equipment digitalization, IoT connectivity and data value creation. It is now entering a fourth stage with physical AI, equipping edge devices with the ability to make autonomous judgments and execute actions.
Ennoconn subsidiary Vecow is responsible for robot system development. Its architecture covers edge computing, multi-sensor integration, data processing and model inference, all based on in-house technology, to deeply understand customers' language and domain knowledge rather than compete directly with robot makers. Vecow said it has already achieved solid traction in markets including autonomous mobile robots, smart agriculture and public safety in North America, as well as service robots in the Asia-Pacific region.
Built on Intel, Nvidia, and Google
On platform partnerships, Ennoconn is building around both Intel and Nvidia compute architectures, and has been maintaining a long-term strategic relationship with Google since 2011. It continues to deepen its ESaaS (Ennoconn Solution as a Service) cloud-edge integration platform. Real-world applications include automated warehousing, agricultural machinery, service robots, smart retail kiosks and mobile security surveillance.
Automated warehousing has already been widely deployed in the back-end operations of major retailers in the US, while demand for agricultural machinery continues to rise on the back of labor shortages in North America.
Raising the Kontron stake
Regarding collaboration with Kontron, Ennoconn said it expects to raise its stake in the Austrian partner to above 30%, with the two sides advancing deep integration across technology, products and markets. Kontron will provide the underlying operating system, IoT software and 5G networking capabilities, while Ennoconn will focus on edge AI servers, robot computing hosts and rugged IPC products.
As Kontron also moves to strengthen its business expansion in North America and other regions, the two companies are expected to leverage their complementarity to create at least NT$10 billion in additional synergies by 2028, with contributions to net profits.
Eyes on 2030
Ennoconn chairman Chu said that 2026 to 2030 will mark the starting point of the company's next growth wave, and that the company aims to expand its global market share and increase the proportion of high-margin businesses on the back of its marketing presence in 73 countries.
Article translated by Rodney Chan and edited by Jerry Chen
