Asustek Computer Inc Regs

Hello, welcome to the ASUS Quarter 1, 2026 Online Investor Conference. Today's meeting will be hosted by ASUS Co-CEO, Mr. SY Xu, Mr. Samson Hu, and CFO, Mr. Nick Wu. The meeting will be divided into two parts. First, the CFO will present ASUS financial results for the first quarter of 2026, followed by the Co-CEO's presentations on operational strategies and future outlook. The second part will be a Q&A session. If you have any questions, please submit them via the webpage and we will address them after the presentation. Thank you. We will now begin with the presentation from the CFO. Hello everyone. Please refer to page five of the online slide deck. This page provides a summary of the consolidated income statement for ACES in the first quarter of 2026. In quarter one, Consolidated brand revenue reached $194 billion. That represents a 2% quarter-over-quarter increase and 44% year-over-year increase. This figure marks a new record high for our single-quarter brand revenue. Operating profit for the first quarter was $10.5 billion, a 30% increase YOY. Net profit after tax was approximately $9.8 billion. down 14% QOQ. Consequently, the EPS for the quarter was approximately $13.2. Because we had a one-time adjustment for bad debt related to accounts receivable in the first quarter of last year, if we look at this from a continuous operations perspective for a normalized comparison, our operating profit growth rate compared to the same period last year actually reached 72%. We consider this an outstanding result. Turning to the margins, our gross margins for the first quarter was 13.8%. That is a slight decline compared to both the previous quarter and the same quarter last year. This primarily reflects the increased revenue contribution from server products. However, our operating margin reached 5.4%, exceeding both our internal management targets as well as external expectations. There were several key drivers for this performance. First, the resilience and brand strength of our products, particularly in the PC and gaming segments. that was delivered quite well. Secondly, our server business has reached a reasonable scale and a healthy level of profitability. Together, these factors drove our single quarter operating profit to approximately $10.5 billion with an operating margin of 5.4%. Moving on to the next page for the summary of non-off income and expenses. In the first quarter, interest income was approximately $520 million. Investment income as approximately $1.37 billion. Foreign exchange sources were approximately $200 million, resulting in total non-off income of approximately $1.76 billion. Looking at page 7, the summary of the grand balance sheet, the most significant change in this page is inventory. which increased from $185.3 billion at the end of last year to $247.1 billion to the end of Q1. This reflects strategic stockpiling of key components as well as some server orders that were delayed. from the first quarter into the second quarter. And so the combination of factors pushed the inventory balance to $247.1 billion, which translates to 122 days of inventory. Our cash conversion cycle was 116 days, while all the operating assets remained stable. And that's page 7. On to page 8, we have the revenue breakdown by business group. For the first quarter, we saw that the system BG accounted for 46% of revenue, open platform BG 26%, and the infrastructure BG 28%. This quarter, the company formally established the ISBG, the Infrastructure Solution Business Group. Simultaneously, we implemented minor internal organizational optimizations. And so the former IoTBG, which handled industrial PCs and AI-related business, are under the ISBG. And additionally, the mini PC and NUC departments have also been integrated into the open platform business group to leverage common distribution channels. And following these adjustments, our IoT business will focus on cutting edge AI solutions and early stage investments in physical AI. And consequently, we are seeing that the contribution to the overall revenue mix will not be significant during this initial investment phase. Breaking revenue down by region, the Q1 breakdown was Asia Pacific at 58%, Europe at 25% and the Americas at 17%. Turning to page 9, this outlines our revenue management targets for this second quarter. Following the record high in Q1, we remain positive, very optimistic for Q2. We expect that PC product revenue will continue to increase by up to 10% to 15% quarter over quarter. Component products are expected to remain flat QOQ. Servers will see another strong surge with an expected quarterly growth of around 50%. To summarize our current operations and the shifts that we are observing in the industry, we see two positive drivers. and one that we consider operational challenge to overcome. The first positive driver is the strong growth in our server division. We see clear order visibility and expect that customer expansion is also likely to happen for the second half of the year, making this primary pillar of growth going forward towards H2. The second positive driver is our core business in branded PCs and gaming products. I think that the combination of our brand, our product competency and supply chain resilience will together allow us to deliver excellent operational results and resilience during a period of significant volatility in terms of cost and pricing within the PC market the primary challenge as many of you have noted is the sharp price volatility of key components specifically memory and storage however as mentioned previously given our two positive operational drivers we believe that our management goal and ambitions are to leverage the company's superior brand power, our product mix, and operational resilience to turn this challenge into another positive operational parameter, allowing us to continue to achieve results that outperform the industry average. And this is something that we are confident internally and will be pushing for in this direction. I will now hand it over to our two co-CEOs to discuss our operational strategy and outlook. Thank you. Thank you, Nick. Good afternoon to all the investors and friends from the press. I am co-CEO SY Xu. I will now walk you through our strategy. In the first quarter, ASUS brand revenue reached $194 billion, that's a YOY increase of 44%, and once again setting a historic high. Growth was impressive across the enterprise, gaming, and consumer markets. The biggest highlight was the enterprise market, which includes our AI servers and commercial PC business. This segment delivered a staggering 190% YOY growth, with its share of total revenue expanding to 37%. As global demand for AI infrastructure enters an explosive growth phase, based on the visibility of current orders, we expect ASUS layouts in the AI server field to experience high growth this year. We will continue to consolidate our core positions in the AI value chain through technical leadership and customer service. Our other two core pillars, gaming and consumer PCs, have also shown strong growth in quarter one. Business grew by over 20%, YOY, accounting for 36% of revenue. The brand premium associated with gaming has led to relatively high profitability. Consumer PC revenue also grew by 6%, accounting for 27% of revenue. Despite component shortages and seasonal demand fluctuations, our shipping momentum has outperformed the industry average, expanding our market share and demonstrating our brand value and resilience. Looking ahead, our strategy for these three product lines is user-centric. By leveraging exceptional products and services and integrating comprehensive AI ecosystem solutions, we will deepen our influence in the gaming, consumer, and enterprise markets. Our goal is to become the most trusted technology partner for global enterprise and create sustainable long-term value for customers, partners, and shareholders. Next page. Pixis has a clear vision for AI. That is our slogan, ubiquitous AI, incredible possibilities. We are implementing this strategy across our four BGs. For the ISBG, we are aiming at large-scale computing power and server architecture. The open platform and system BGs aim to provide private computing environments for enterprises and organizations, such as AI PCs and other smart devices. This allows us to emphasize data privacy and low latency. As for the AIoT business group, they will be focusing on applying AI to the physical world such as smart factories and medical imaging. This layout allows ASUS to not only lead the market in hardware but also to create application scenarios through deep hardware software integration. This makes ASUS one of the few brands capable of building a complete AI ecosystem expanding high-performance cloud to edge AI and to evolving towards physical AI. Regarding authentic AI and open cloud, which are very hot topics right now, I want to provide a preview Just like many other companies, Asus will aim to integrate GenTech AI software applications across our entire notebook lineup via Asus Cloud. We will demonstrate more details at Computex, providing users with a more comprehensive AI automated assistant to enhance the user experience, efficiency, and productivity. I mean, all of these are, I think, a clear blueprint for ASUS in the AI era and represents our irreplaceable competitive advantage. Next page. As mentioned, our commercial market growth includes commercial PCs. In recent years, our product strategy has evolved beyond simple hardware manufacturing. We have transformed into a comprehensive solution partner for the enterprise and education markets. I want to highlight three key achievements in the commercial market. First is our product innovation, debuted at CES. The ASUS ExpertBook Ultra symbolizes our technical leadership in the premium business market. It is the world's first laptop featuring a 10.7 OLED screen, ultra-lightweight 0.99 kg chassis, yet it delivers 50 tops of AI compute power and up to 26 hours of battery life. More than just a PC, it's a benchmark for mobile office work, combining Euro-ceramic craftsmanship with extreme durability. By maintaining a full range of connectivity, introducing an innovative touchpad, we have solved key pain points for business professionals. It has won several international honors, including the 2026 Red Dot and IF Design Awards, and has been rated by several authoritative media outlets as the best business laptop of 2026. We believe that during the upcoming AIPC replacement cycle, this will establish an irreplaceable premium advantage. We've recently held product launches for the ExpertBook Ultra across Southeast Asia and received very positive feedback. We believe that it will be a primary driver for our commercial PC growth going forward this year. Secondly, we are deeply interested integrating AI and ESG into our business solutions. We are actively helping enterprises build next-generation AI office environments by developing diversified management tools to simplify IT processes. We've also implemented the Expert Guardian security architecture across our lineup to provide a robot shield for business laptops. Our products seamlessly blend hybrid AI into daily productivity and security. Regarding sustainability, ASUS is setting an industry benchmark. The expert book features sustainable low carbon designs and utilizes recycled materials. Beyond design, we provide transparent sustainability data and low carbon services to help customers track and achieve their own ESG goals. This win-win strategy of combining technology with sustainability is becoming a key advantage in winning large enterprise clients. Third is our strong growth in the education sector. Our performance in the education market continues to outpace the competition. Education-specific devices remain a stable mainstay of our commercial business. From last year through today, our strong product capabilities and ecosystem integration have helped us win the Giga project in Japan, where ASUS is currently ranked second in market share, as well as education centers in France. This demonstrates our leadership in digital education transformation and provides strong momentum for future revenue growth. Through good product design, industry leading AI and ESG solutions, and a deep presence in the education market, we are continuing to expand our market share and brand value. We are confident in maintaining strong growth momentum in the commercial market through 2026. Next page. 2026 is also a milestone year as the ASUS gaming brand ROG turns 20 years old. We began our warm-up activities at CES and have been engaging global fans since February through a series of international submission events to uncover the stories between the player and the ROG brand. Through the ROG Homecoming event, We expect the celebration to peak at Computex in June, where we will invite core players from around the world to Taiwan for a deep exchange between our products and the community. Leveraging high brand loyalty, we will continue to lead the gaming industry for the next 20 years. Beyond the celebrations, we are strengthening our partnerships with top-tier teams such as T1, DRX, and NRG. Through deep dive workshops, ROG integrates professional player insights directly into R&D. Real-world feedback from the arena regarding speed and precision is converted into core metrics for subsequent product upgrades. Simultaneously, by sponsoring top-tier global events like the LCK Cup for League of Legends, we unify the gaming community and convert that passion into growth momentum. Through these long-term investments, we are expanding ROG's brand exposure within the global gaming community and increasing the international influence of our gaming ecosystem, consolidating our brand's position as the world's number one gaming brand. I'll now hand the time over to Samson. Thank you. Thank you, SY. Hello to all the media and investors. I am Sam Sung Hoo. I will now introduce the operational performance and strategic priorities of each BG. First, the system BG. Despite the pressure of rising component costs, particularly memory, the system BG's P2 revenue still achieved a high YOY growth of 25% in the first quarter. This demonstrates ASUS growth momentum and brand value. This was primarily driven by a higher proportion of high-value products in our mix, including gaming, high-end models, co-pilot plus PCs, and commercial PCs excluding Chromebooks. Together, they now account for 60% of our total revenue. The higher average selling price of this mix provides us with strong operational resilience. Shipments of commercial PCs following several years of strategic planning, we began to solve significant results last year, where we achieved 60% growth YOY in quarter one. Our commercial market share also is continuing to rise. As Swai mentioned, we are aggressively promoting our highest-end commercial model, the ExpertBook Ultra, across the Asia-Pacific region, and the results have been very positive. Our overall PC operational strategy is to drive growth through innovative products, comprehensive solutions, and strong brand value. while strengthening our leadership in consumer and gaming sectors and thus increasing the value recognition and market share of our commercial PCs. Next, regarding the Open Platform BG. After separating server revenue, the BG still achieved year-over-year growth of over 5% in Q1, despite the headwinds of rising memory prices. This was driven mainly by key products in the ROG gaming ecosystem, including graphics cards and gaming accessories, which grew by 30% and 40% respectively. This underscores the strong momentum of the ROG brand ecosystem in driving upgrades across the gaming market and consolidating ROG's leadership as a brand. Specifically in the monitoring business, ASUS continues to be a driver of technical innovation. According to the latest TrendForce report, we hold a 22% market share in the OLED monitoring market, establishing ASUS as an absolute leader as we are the world's largest OLED monitor brand. Overall, the open platform of BG will continue to deepen innovation and ecosystem construction to expand our market advantage. Next page, please. Now let's discuss servers. Total server revenue in quarter one achieved breakthrough growth as well, increasing threefold year over year. This demonstrates our high speed growth momentum as AI continues to reshape the industrial landscape and redefine the value of technology. The ISBG will continue to strengthen its long-term commitment to innovation and expand its investment in AI infrastructure. For example, at the NVIDIA GTC 2026 conference, ACES was invited as a diamond level sponsor. That is the highest level of sponsorship We unveiled at the event a comprehensive global all-energy AI infrastructure, which is a complete end-to-end solution featuring the NVIDIA VeraRubin NVL72 and HGX Rubin platforms. This effectively means the AI computing requirements of enterprises and data centers can be met by said system. Additionally, in January, we participated in the SCA HPC Asia 2026 exhibition in Japan, where we showcase SGX and MGX systems based on the NVIDIA Blackwell architecture, presenting a complete ASUS solution for supporting various large-scale AI workloads in the AI factory scenario. Turning to the next page. After the ISBG internal organizational optimizations, we are now seeing that the AIoTBG products are now focusing on vertical integration for AI such as smart manufacturing and smart cities. And there are a few notable developments that I would like to share. At the Embedded World 2026 event, Asus delivered significant end-to-end edge AI innovation where we unveiled industrial automation and smart city applications that are powered by scalable AI solutions and partner ecosystems, demonstrating our key role in driving industrial digital transformation and the practical application of AI. accelerating the transition of AI from edge computing to diverse real-world scenarios and the business opportunities therein. At the Smart City Expo 2026 in March, ACES led over 30 ecosystem partners to showcase a scalable blueprint for an AI city. I think that as we position sovereign AI and our five city urban architecture at its core, we were able to integrate over 60 smart city solutions covering traffic, governance, security, energy, and sustainability. And that demonstrates our complete capability from architectural design to actual implementation, moving city AI from a concept to a replicable and scalable global application model. I would also like to mention the core progress of our robotics business. We are currently building a unified AI platform that spans both physical and virtual carriers. This means we are no longer looking at the hardware of a single robot, but rather we're trying to use common shared underlying single AI to support different forms of robotics, virtual agents, and digital interfaces. We believe that this architecture allows AI capabilities to cross different product lines and ensure a consistent service experience across different devices. Simply put, ACES is not just making hardware robotics. We are positioning ourselves as an AI robotics platform that connects the physical and virtual worlds, moving towards a repeatable and scalable business model. Turn to the next page. Product innovation has always been a core competitive strength we are proud of. and I want to share a recent achievement. At the globally recognized IF Design Awards this year, Asus was able to take home a total of 27 awards. Notably, the Asus ZenBook Duo received the highest honor for its deep integration of smart design and AI applications, netting us the IF Gold Award. Now, the award was granted to only 75 pieces from millions of global entries, which I think proves that ASUS possesses world-class competitiveness in product experience and innovation. And finally, turning to this page, I think that market environments are always changing and ACES is leveraging its operational resilience to face industry challenges such as current shortages of cost increases for key components like memories and CPU. And through agile supply chain management and strong relationships with our supply chain partners, we are able to ensure a relative competitive advantage in the industry. And the fact that our PC revenue grew 25% in Q1 proves that our operational resilience is superior to the industry average. And furthermore, our positions as the leading gaming brand helps us maintain an advantage. With gaming-related revenue growing by over 20% in Q1, I think that this showcases our brand resilience and provides us with a better position to respond to market changes and challenges. Lastly, turning to this page, with AI servers achieving exponential growth in quarter one and our strong visibility of orders for quarter two and the second half of the year, I want to update our guidance. Previously, we projected annual growth of between 50% to 100%. And today, we are more confident that total survey revenue for the year will reach 100% growth. We are confident that we can hit that 100% mark. And that is something that I would like to point out. And lastly, beyond highlighting that breakthrough in revenue scale, the profitability of our server business has also reached a very healthy level relative to the industry. Therefore, we are confident that the AI server business will become our third pillar of long-term growth, which will create sustainable value for our shareholders. And that concludes my presentation. Thank you. Thank you to our two co-CEOs and CFO. We will now move on to the Q&A session. If you have any questions, please submit them via the question mark icon on the left-hand side of the webpage. We will address them after consolidating our questions. Thank you. Okay, the first question comes from KGI Asia. Regarding the 2026 server revenue growth target, what is the expected shipping timeline for the Vera Rubin platform cabinets? And do you have any anticipations for the current statuses of server customer orders? Okay, and as I mentioned before, in our previous conference, we projected annual growth between 50% to 100%. However, based on the three-fold growth that we have seen in Q1, as well as our visibility into orders, costs and demand for Q2, as well as the second half of the year, particularly with NeoCloud customers, we do believe that the overall outlook is very optimistic. Therefore, we have significant confidence in achieving at least 100% annual growth at this point in time. Secondly, due to our growth track record over the past few years and our deep-rooted technical strength in servers as a whole, we have consistently performed exceptionally well in terms of yield and shipping cadence whenever a new platform is released. So we are pretty confident that we will be the first year of mass production for the launch of the next gen Vera Ruby platform. And we've also received, or rather we've already received very strong orders Thank you. The second question is from KGI Asia. Regarding the outlook for PC demands in the second half of 2026, will the traditional seasonal peak be altered because of early consumer purchases? And also, what is your view on the year-over-year changes in global PC ship and volume for 2026? and what are ASUS specific shipment and revenue YOY targets. Since last year, most research forums have projected uh global pc market decline of roughly 10 to 15 percent this year and that is due largely to rising component prices of course but because components are more expensive The ASP has also increased. So from a revenue perspective, we believe that the overall PC related revenue for the year should remain either flat or perhaps see modest growth. Regarding shipment volume, I think last year, these firms originally predicted global market of around 240 million units distributed fairly evenly at roughly 60 million per quarter and so I think that Q1 shipments right now actually exceeded those expectations by about 6%. It's substantial overshooting. And of course this happened because customers are anticipating that trend of rising memory prices. And so many channel partners are already stocking up. And so since most brand manufacturers still have memory inventory from the second half of last year's I think that the ASPs in quarter one will stay or were relatively stable compared to quarter four and so customers who have that financial capacity then they are placing orders now to again avoid higher future costs of waiting to buy later down the line and so that's really translated to what effectively feels like wait between the first and second half of the year this year may differ from previous years because typically the second half is stronger you know perhaps a 40-60 or a 45-55 split but this year it may be reversed perhaps 60-40 or even 70-30 because right now a lot of these stocks are going out to our channel partners it's different from what's actually reaching the hands of end users of course one channel partners have that stock they will gradually you know as they are able to sell those cheaper stocks are depleted that ISPs may very well increase. We've already seen some brands adjust retail prices in certain countries starting quarter two and I think that these adjustments will We're likely increasing quarter three and quarter four, although again, it's hard to predict as it depends on the end user acceptance of price hikes. So really, I think that split is very likely to be split, to be reversed, you know, 60-40, some are even saying 70-30. But really, the visibility on that part remains somewhat obscure because it's most dependent on market reception. As for ACES, we always set our targets to outperform the market average. In the past, we tried to outperform. we've traditionally tried to offer from the market average and so even though the market is expected to decline by 10-15%, our internal goal still to maintain that shipment volume relative to last year. But of course combined with an increase in ASP, we expect that our total PC revenue for the year to show significant growth still. Thank you. Okay, our third question is from Morgan Stanley. Congratulations on your quarter one results. Regarding the quarter two revenue guidance of 10 to 15% growth, what is the trend in terms of volume relative to price? Also, do you expect the operating margin to continue to expand in quarter two? Okay, as our two co-CEOs mentioned, despite existing industry volatility, our brand value our product mix and supply chain resilience together allows us to maintain results that are stable or rather superior to the industry and so if we were to break down the 10 to 15 percent quarter on quarter growth that guidance for pcs in quarter two I think that volume growth will likely be in the single digits, while price growth will be between the high single digits and low double digits. And so we're seeing simultaneous growth in both volume and price from quarter 1 to quarter 2. As for profitability, ASUS has long targeted a healthy operating margin range of 4 to 5%. And while different periods require different operational considerations, we are confident that we can reach this healthy range in quarter two. And so if we are able to achieve further operational breakthroughs, we will certainly aim for the higher end of that range or better. Thank you. The next question comes from JP Morgan. Could the co-CEO elaborate on the 100% server growth target? Is the momentum driven by new customers or other growth areas? Also, what is the approximate range for a quote-unquote healthy server profit margin? Okay, and let me go into that a bit more. So, this year, Asus is confident in reaching that 100% growth and is supported by a strong macro environment so really the capex expenditures of major global CSPs are undergoing upgrades now previous estimates place that at 600 to 700 billion But that has since been revised upwards to over 700 billion. And so I think that indicates strong industry confidence. And I think a practical example of this is the monetization of tokens. Previously there was significant concern about whether selling tokens would be profitable. but we're now seeing widespread enterprise adoption of AI. For instance, the broad acceptance of anthropic within corporations, enterprises, that privatization model from selling tokens is starting to generate actual commercial revenue, which in turn fuels further investment in AI infrastructures. And so that's really the macro environment that's playing to our advantage. And so global AI compute capacity remains by and large still insufficient. Beyond the big four CSPs, we are also seeing massive demand from NeoCloud customers. A significant portion of our current contribution comes from these NeoCloud clients. And that is also a segment where we have being able to make continuous significant breakthroughs over the last two years and additionally as enterprise inference applications increase and these new cloud clients are able to make breakthroughs we are seeing more and more demand for SGX servers from large corporations and research institutions but of course there's also demand from governments owing to sovereign AI related needs and so together these factors explain why our order visibility for Q2 and the second half of the year is so high but as for profitability Our revenue scale has reached a high level due to exponential growth over the last few years. Again, I think that scale that we have supports a profit margin that is very close to the level of tier 1 industry players. So really, we're hitting that tier 1 level. of profitability. The next question comes from the Economic Daily News. We have three questions. First, regarding the impact of Apple's budget MacBook Neo on the market, whether Asus has a product strategy to respond to that. The second question is regarding the impact of executive move between Qualcomm and Intel product architecture. And the third question is whether the company has any expectations regarding the DRAM price hikes and any stockpiling strategies. Okay. So firstly, regarding Apple's budget laptop, we were aware of the launch since last year and our business units had planned corresponding products. However, since memory prices in quarter one surged by nearly 100%, which shifted that price point significantly, the price point that we intended to compete on has been shifted and so I think it's important to note that Apple does have an advantage here because of their massive volume and long-term contracts that they have signed with upstream memory suppliers before the price hikes so I think that at this point We are discussing the best response to the NEO internally and among industry partners. We will share more once we have final decisions. made and ready to be announced to the public and we will save that for a certain point in the future. As for the second question regarding that executive that moves from Qualcomm to Intel, I think we're actually quite familiar with this individual from their time at Qualcomm. We have worked with the individual extensively and even though we haven't met officially since that transition. So at least for the moment we do not know the extent of strategies or projects that individual may have. But we do know for a fact that this executive, the executive previously responsible for the CCC protocol has not reported to him, so we don't expect major short-term strategy shifts. As for Qualcomm and whether they will have any strategy shifts, I think they do remain aggressive in pushing the Windows on ARM strategy. So again, short term, I think that's also something that's not likely to change. Over on to the DRAM question. So how is Asus dealing with that price hike? I think in the previous few earnings calls, we've noted that this is something that's been anticipated since second half of 2025. And so we began working with major supply partners, signing MOUs. And initially our goal was to be able to meet our growth targets. At least that was at the time. We were hoping to maintain that pace of growth. But due to industry manufacturing limits, Vendors can only provide volumes roughly flat compared to 2025 levels. Of course we do follow strict internal rules for stockpiling. We work very closely with our option suppliers because of course it's going to be tempting on whether the suppliers can meet our demand. In terms of DRAN stockpiling internally, we have certain stockpiles in place already and we're just following our original stockpiling rules and schedules. Because given the current memory price hikes, everyone is thinking of the same thing. the more you can save but then the suppliers they know what you're thinking about even if you try to you know get those stockpiles in then not necessarily gonna release that stockpile so it's gonna be working based on the previously discussed MOU volumes and distribute them reasonably I mean at least currently we are able to meet our business demands But if you want to take advantage of the supplies, the many supplies, that's not likely to happen. Thank you. Okay, the next question comes from DigiTimes. Regarding the next-gen NVIDIA Vero Rubin platform, are the specs and timings confirmed already? And is ASUS in the first year of launch? And whether you can share with us the timeline for server order fulfillment and revenue targets. Okay, so I think with any new generation platform, it's important to note that there are always initial fluctuations due to technical considerations or supply chain readiness considerations. So I cannot speak for our partner's specific timelines. Ultimately, we must respect our suppliers. So I can only share to the extent possible that this is not something that That's appropriate for us to answer. That's ultimately down to them. What I can confirm is that because of our close relationship with them, we are always aligned on adjustments, if any. Regardless of any shifts, ACES will remain in that first tier of release. And very importantly, I think this is supported by our technical foundation, and the fact that we already have clear orders for the Vera Rubin generation of products. So we are able to stay in that first tier of release. Thank you. Okay, the next question comes from Nikkei Asia. Regarding the current status of memory and CPU supply, Can you share with us whether ACES is prioritizing high-end products during this period of higher prices? Okay, so due to the AI server boom, supply for both memory and CPUs have become very tight. And furthermore, we're seeing that memory shortages in particular and those price hikes have been extreme for the past few quarters. CPU supply is at least relative to memory slightly better, but since ultimately semiconductor capacity is limited, it's still the same problem at the end of the day. Manufacturers will naturally shift capacity to the most profitable product lines. and so the the demand for ai servers and energetic ai together have made cpu demand very very hot so i think that It's important to know that both memory and CPU are undergoing both supply shortages and price hikes. Now for Asus, we do work very closely with our upstream memory and CPU vendors. And so despite the existing shortages, they're not severely impacting our operations. Of course, internally, it is true that high-end products do have higher priority. However, we will not be abandoning the mid to low-end completely. Of course, a product line that covers all customer needs should be respected. But we are ultimately more careful in balancing our priority for high-end relative to mid to low-end products. We want to ensure that we respect that priority for the high-end while not excessively impacting our mid to low-end market share. That is really something that we're trying to juggle very carefully. Okay, for the next question, it's from Transglobe Life Insurance. So within the ISPG, what is the revenue split between AI servers and general purpose servers? Do you expect more obvious growth in general purpose servers in future quarters? Okay, so I can put it this way. General purpose servers currently account for roughly 10% of ISBG revenue. However, we have noticed that demand for inferencing and agentic AI, especially on the enterprise side, is starting to develop. So as that begins to pick up, We're seeing that given those applications, general purpose servers do play a critical role in synergy with AI servers. So we do expect that demand for general purpose servers to grow over the next few years. And so we will adjust our BG layer accordingly. to meet those expected demands that are growing. Okay, I think we have answered the questions that people have raised. So now I would like to pass the microphone to our two co-CEOs to give their closing remarks. Once again, I would like to thank you all for supporting ACES. And of course, we have to thank our staff. In quarter one, we delivered very strong performances. And as discussed earlier, we will continue to invest deeply in commercial PCs this year. I think that our consumer PC business has already seen that long-term success mature. And according to IDC reports, our consumer PC revenue has officially surpassed that of HP, making us the number two consumer notebook brand globally. Because we have reached that high level of market share in that segment, we are shifting some resources to the commercial sectors where we see significantly more room for growth. And we do hope that this is something that we will be able to see that growth take form and contribute to ASUS overall. And hopefully that will play out as intended. Once again, I would like to thank our investors and media friends for your support and for your long-term focus on ASUS. I think for this earnings call, we've covered a wide variety of topics. The industry is undergoing a series of challenges, component shortages, and rising costs for memory and CPU. And these are industry-wide challenges. For us, as we shared previously, we are confident in our ability to navigate these challenges through our close relationships with options suppliers, downstream channel partners, and our price leadership in the market particularly in the gaming market we will use these collective advantages to dynamically adjust our product mix as well as adjust pricing to maintain a competitive edge in the industry our high proportion of high value products across items like motherboards, gaming products, and commercial lines together provide the operational resilience needed to handle that market volatility. And of course, as we have discussed extensively, we have seen the AI server business undergo exponential growth very high speed growth for the past few years that has reached a very substantial scale and so that has resulted in both revenue growth and healthy profitability so AI servers will continue to be a primary pillar of growth for ACES in terms of both revenue and profit for the coming years so overall ACES will maintain a pragmatic and proactive approach to these industry challenges and AI opportunities to create higher brand value and operational growth. Once again, I would like to thank you all.