Written by the editorial team of Today Weekly
Since the beginning of this year, the Guandu headquarters of Pegatron, the world’s second largest electronics foundry, has become more lively; there is a group of new forces that “grow up” almost every month, which has recently caused heated discussions in the technology industry.
This group of engineers with more than 100 people actually worked in the server business of Hon Hai, Wistron, Quanta, and Mitac just five months ago. Now, the unit to which this batch of 100-person troops belongs is the business group numbered “18” established by Pegatron earlier this year, and is referred to as BU18 (the 18th business group) internally. The leader of the business group is Xu Yanzhen, who has followed Tong Zixian, chairman of Pegatron, for nearly 20 years since the time of Asus; moreover, it also has a support army inside.
This support army is the newly established “5G Product Division” under the “Sixth Business Group” of Pegatron’s Netcom product business 14 months ago. This team, which also has more than 100 employees so far, is directly under the same supervisor. Xu Yanzhen, known as “Xu Bo” inside Pegatron, holds a Ph.D. in electrical engineering from the University of Florida.
“In the past, Pegatron was considered to be relatively slow in the deployment of servers. In the future, these two units will cooperate with each other to fully sprint into the 5G and server markets.” A Pegatron veteran with a research and development background told us.
“We’re looking at the two teams under Xu Bo, with a total of more than 200 people, it should soon exceed 400 people!” A senior executive in the electronic assembly industry observed that following the establishment of BU18, Pegatron actively poached people outside the rhythm , the fifth electronic brother with the lowest “presence” in the server industry in the past seems to be “playing real” this time.
A big bet!
However, there are also bad voices. “All the companies in history that built servers have to pay for 5 years first!” said a deputy general manager of a component factory. Way to endure those five years.”
If the annual salary of an engineer is calculated at 1 million yuan, the establishment of 400 people is equal to at least 400 million yuan per year for personnel costs alone, and regardless of the hardware investment of production line equipment, fixtures and molds that can easily break 100 million yuan, Pegatron will once more Battle server, the stakes are not too big, Tong Zixian, who is good at late attack, what exactly did he see this time?
the reason is simple. The server, which can be used by multiple people at the same time through the Internet, is almost an “invisible” computer product. According to the estimation of International Data Information (IDC), the global output value this year will reach a record high of NT$3.4 trillion. , and increased by 13% compared with last year. If the total growth rate in the next three years is calculated by 30%, it is estimated that in the next year, the output value will be 1 trillion yuan more than last year.
Not only Pegatron, but for the server business, ASUS also broke the principle of not touching manufacturing in the past.
In the past 14 months, ASUS, under the decision of Chairman Shi Chongtang, spent 2.3 billion yuan before and following to acquire a 45% stake in Rui Chuan, an industrial computer factory. What is surprising regarding this merger case is that in addition to the “cross-border” industrial computer from Asus, a PC brand factory, the company also announced that it will produce its own designed servers in Rui Chuan’s Shulin factory, breaking the 12-year history. The former cut the manufacturing business to Pegatron, and only focused on the persistence of the brand.
In fact, ASUS has been deploying servers for a long time. In addition to the year-on-year growth of related performance in the past 8 years, last year’s revenue increased by more than 50%; the largest and fastest-growing product line is customers from white-brand servers. Including Europe’s largest web hosting provider OVH, Germany’s top three web hosting providers Hetzner are its customers.
At present, there are regarding 400 to 500 people in the ASUS server business unit, which is not far from the size of the Gigabyte Netcom business group. In this department, more than one-third of the members are currently focusing on the white-label market. A server industry source revealed, ” I heard that ASUS has announced its goal internally, that the business entity will have an IPO (initial public offering) within 6 years.”
The rigid demand for localization, coupled with the trends of the Metaverse, self-driving cars, digital transformation, and online payment, all do not require the server hardware, which makes the relevant Taiwanese suppliers, since the end of February, the Russian-Ukrainian war, When the broader market corrected more than 1600 points and fell nearly 9%, it became a relatively defensive group.
Entering the new server era, what will be deconstructed will not only be the business model of the downstream assembly plant, but also the business model that may be loosened in the future, and even the ranking of the upstream chip industry will probably be reshuffled. The long-standing Taiwanese industry will have a place. For more content, please refer to the latest issue of Today Weekly (No. 1323)
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