Direct:
Asus (TPE: 2357) booked a record NT$194.05 billion (about US$6.16 billion) in Q1 2026 brand revenue, up 44% year over year. Server-driven, as expected, with AI server revenue running roughly 3x year over year and full-year server revenue now guided to rise at least 100%. Q2 server is guided up 50% sequentially per Asus's own deck, with Taipei Times reporting a 50–100% QoQ range. The number that matters more, though, is below the revenue line: operating profit fell 8% YoY to NT$10.5 billion, and net profit fell 23% YoY to NT$9.8 billion. Gross margin compressed to 13.8% from 15.5% a year ago.
Component costs are the cleanest explanation for the gross-margin squeeze. They do not fully explain the net-profit decline, which also reflects opex and a 53% drop in non-operating items. But the gross-margin compression is exactly what Co-CEO Samson Hu has been telegraphing since late December, when Asus followed Dell with formal channel notice of January 5 price hikes citing DRAM and NAND specifically. Hu told Commercial Times at the time that he did not expect memory pricing to ease before the second half of 2026.
TrendForce's revised Q1 contract data backs him up harder than the initial forecasts did. Conventional DRAM landed at +90–95% QoQ against the early +55–60% call. NAND wafers came in at +55–60% against +33–38%. Server DRAM ran around +90%. Suppliers (Samsung (KRX: 005930), SK hynix (KRX: 000660), Micron (NASDAQ: MU), Kioxia (TYO: 285A) are routing advanced-node capacity toward HBM and enterprise SSD because that's where the margin is. Everything else gets the leftovers at a markup.
This is the split effect of AI infrastructure on a diversified OEM, on one page. Server segment carries the revenue line. PC and components segment absorbs the input-cost shock and drags margin. Asus guided PC revenue up only 10–15% sequentially in Q2, components roughly flat.
For consumer SSD buyers the read-through is uncomfortable. The same capacity allocation that's letting Asus triple its AI server business is what's keeping DRAM-equipped Gen 4 and Gen 5 drives expensive, pushing controller vendors like Phison (TPE: 8299) and Silicon Motion (NASDAQ: SIMO) toward DRAM-less designs, and giving us the QLC-everywhere market we have now. IDC has the DRAM shortage running into 2027. Nothing in the Asus print suggests that timeline is improving.
Sources
- Asus, Q1 2026 Investor Relations deck (PDF), May 2026
- DigiTimes, “Asus's record revenue signals greater exposure to AI server demand and higher component costs,” May 14, 2026 (above-paywall preview only)
- Taipei Times, “Asustek predicts good quarter,” May 13, 2026
- Taiwan News, “Taiwan's Asus projects strong server revenue growth on AI boom,” May 13, 2026
- TrendForce, “ASUS to Raise Prices on Selected PC Lines from Jan. 5 Amid Memory Cost Surge, Following Dell,” December 31, 2025
- TrendForce, initial Q1 2026 DRAM/NAND contract price forecast, January 5, 2026
- TrendForce, revised Q1 2026 DRAM/NAND contract price update, February 2, 2026
- DigiTimes, “Memory supply gap stretches beyond 2028 as cloud capex tops US$725 billion,” May 6, 2026 (headline reference)
- IDC PC shipment outlook referenced via Neowin coverage, late December 2025
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