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The Taiwanese contract manufacturer more than doubled third-quarter sales, while its profit percentage kept sliding

Wed 11 Nov 2026 · 20:07 EST · 3 min read

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Quanta Computer just had the biggest quarter in its history. It also kept a smaller slice of each sale than it did a year ago.

The Taiwanese contract manufacturer (2382.TW) reported third-quarter 2026 consolidated revenue of NT$1.115545 trillion, roughly $34.1 billion. Its gross margin slipped to 4.75%. Both facts point the same way: AI servers are now running the show.

Record sales, thinner slices

Third-quarter revenue rose 125.2% year-over-year and 7.6% from the second quarter.

The nine-month total tells a similar story. Revenue for the first three quarters of 2026 came to NT$2.961358 trillion, approximately $90.2 billion, up 99.4% from the same stretch a year earlier.

Both the quarterly and nine-month figures set new company records.

Gross margin landed at 4.75% in the third quarter, down from 5.02% in the second quarter and 6.85% in the year-ago period.

That works out to a 27 basis point drop quarter-over-quarter and a 210 basis point decline year-over-year. A basis point is one hundredth of a percentage point, so the year-over-year slide is a bit more than two full points.

Why the margin keeps shrinking

Quanta pointed to three pressures. Material costs for notebooks rose. Notebook shipments fell. And the product mix tilted further toward pricier AI server racks.

Expensive AI racks carry big price tags, which inflate revenue. But the percentage Quanta keeps on each rack is smaller than on some of its other work.

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The profit numbers back that up. Operating profit for the quarter rose 75.3% year-over-year to NT$32.204 billion.

Net profit attributable to the parent company climbed 73% to NT$28.422 billion. That translated into earnings per share of NT$7.08 for the quarter.

Across the first nine months, earnings per share reached NT$20.03, another company record.

A server company that also makes notebooks

At an investor conference on November 11, 2026, management said servers made up more than 80% of third-quarter revenue. AI servers accounted for 75-80% of that server revenue.

Management also signaled where it thinks things are heading. The company expects server revenue to keep growing strongly into 2027.

Quanta forecasts that servers will account for 85-90% of total revenue next year, with AI servers expected to represent 80-85% of server revenue.

Executives framed the strategy around absolute profit growth rather than percentage margins.

What this means for investors and the AI supply chain

The first takeaway is about demand. A contract manufacturer does not more than double revenue in a year unless customers are placing very large orders. Quanta’s numbers are a direct read on how much AI infrastructure is being built.

The second takeaway is about how to value this kind of growth. Management’s pitch to focus on absolute profit is reasonable on its face. A company earning 4.75% on a much larger base can make more money than one earning 6.85% on a smaller base, and Quanta’s 73% net profit growth proves the point for now.

With servers already above 80% of revenue and guided toward 85-90% in 2027, Quanta’s fortunes are increasingly tied to a single theme.

A few things are worth watching from here. One is whether the gross margin stabilizes or keeps edging down as AI servers take a bigger share. Another is whether notebook material costs ease or keep biting into the legacy business.

Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.

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