US-based Dell Technologies is expanding its AI server production network in Taiwan by adding Compal Electronics. Consequently, this move strengthens Dell’s capabilities amid rising global demand. Moreover, the addition of Compal brings new capacity and expertise to Dell’s established manufacturing partners.
At present, Dell’s production network includes Wistron, Foxconn, Inventec, and MiTAC. Notably, Compal secured a significant order worth NT$100 billion (US$3.3 billion). The company will begin deliveries in the second half of this year, highlighting the growing importance of this sector.
Dell’s increased focus responds directly to surging demand for AI infrastructure worldwide. Between May and July, Dell procured 2,000 Nvidia GB200 server racks to meet this demand. Furthermore, industry observers expect Dell’s outsourcing orders to grow as the US accelerates AI infrastructure deployment in 2026.
Compal specializes in designing, manufacturing, and selling 5C electronic products. These include computers, communication devices, consumer electronics, car electronics, and digital content-related devices. As a result, the company offers comprehensive services, from product design to mass production, making it an ideal partner for Dell.
To support the new order, Compal’s board approved a US$300 million investment. This funding will establish a facility in North America dedicated to server rack assembly and testing. The facility is expected to become operational in the first half of 2026, thus enhancing Compal’s global footprint.
Compal recently reported a second-quarter net profit after tax of NT$482 million. However, this figure represents a 78% decline from the previous quarter and an 83% drop year-on-year. The decrease largely results from NT$1.4 billion in foreign exchange losses due to Taiwan dollar appreciation.
Despite this setback, analysts remain optimistic about Compal’s future. They expect operations to rebound in the second half of the year as exchange rates stabilize and new orders increase. Indeed, the company’s role in Dell’s expanding network underlines its potential for growth.
In summary, Dell’s expansion of production in Taiwan through Compal marks a significant step in meeting global AI infrastructure needs. Ultimately, this development strengthens the region’s position in advanced technology manufacturing and highlights growing international collaboration.
