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Asustek Plans Server Production Line in the U.S. to Capitalize on AI Opportunities

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TL;DR

  • Asustek aims to set up a server production line in Silicon Valley, riding the wave of AI-powered computing opportunities.
  • Co-CEO of Asustek anticipates AI servers to drive more than 50% of total server revenue in the near future.
  • Lenovo files a lawsuit against Asustek, alleging patent infringement in laptops, adding legal complexity to its growth plans.

Asustek Computer Inc., a prominent Taiwan-based tech brand, has unveiled its plans to establish a production line in the United States, with mass production scheduled to commence in 2024. This move aligns with the global surge in opportunities stemming from advancements in artificial intelligence (AI) applications. While the financial details of the Silicon Valley investment have not been disclosed, Asustek is gearing up to assemble semi-finished products for server production, capitalizing on the burgeoning era of AI-powered computing.*

The Silicon Valley investment

Asustek’s decision to set up a production line in Silicon Valley is a strategic move aimed at tapping into the flourishing opportunities in AI-driven technologies. The company’s Senior Vice President, Jackie Hsu, emphasized that they are keen on leveraging the growth potential of the “new era of AI-powered computing” to attract a broader customer base.

Hsu stated, “We just kicked off our U.S. production project in Silicon Valley, where we aim to assemble some semi-finished parts for our growing server system business. That will help us to be close to our customers in North America.”

The proximity to the North American market is a key factor in Asustek’s strategy, as Hsu explained, “For servers, we think having some manufacturing capacity close to the market will be helpful for our business development. Some server customers would want suppliers to have production close by.”

AI-related products driving growth

At an investor conference earlier this week, Asustek’s co-CEO S.Y. Hsu underscored the significance of AI-related products in driving the company’s growth. He anticipates that AI PC development will trigger a rebound in personal computer demand and expects AI servers to account for more than 50 percent of its total server revenue next year.

Asustek is not limiting its expansion plans to the United States alone. According to reports, the company is also ramping up its production capacity in other locations. A facility in Taoyuan, northern Taiwan, is set to roll out motherboards, graphics cards, mini PCs, and server-related products, with commercial production scheduled for 2024. Furthermore, Asustek is exploring the possibility of establishing assembly lines in Europe and other regions in response to client demand.

Lenovo files lawsuit against Asustek

In the midst of Asustek’s expansion plans and growth projections, it faces a legal challenge from Lenovo Group Ltd., the world’s largest PC vendor. Lenovo has filed a lawsuit against its Taiwanese rival in a California federal court. The lawsuit alleges that Asustek has infringed on four of Lenovo’s patents related to wireless communications, diagonal touchpad scrolling, and a hinge that allows a laptop to convert to a tablet configuration.

The Reuters report highlights that the features suspected of infringing on Lenovo’s patents were found in Asustek’s Zenbook Pro and Zenbook Flip 14 laptops. Lenovo is seeking unspecified financial damages for lost profits and royalties, in addition to a court order permanently blocking the alleged infringement.

In response to the lawsuit, Asustek has adhered to its policy of not commenting on ongoing legal matters. In a statement posted on the Taiwan Stock Exchange, where Asustek shares are traded, the company affirmed its commitment to relying on the law to protect its interests.

Asustek’s decision to establish a server production line in Silicon Valley and its strategic focus on AI-related products reflect the company’s ambitions to capitalize on the growing opportunities in the tech industry. While the financial details of the Silicon Valley investment remain undisclosed, the move to be closer to North American customers in the AI-powered computing era holds promise for Asustek’s future growth.

However, the legal challenge from Lenovo poses a potential obstacle, as the two tech giants engage in a legal battle over alleged patent infringements. Asustek’s response to the lawsuit suggests that it will vigorously defend its interests through the legal system.

In the coming years, Asustek’s expansion plans, coupled with its AI-related product portfolio, will be closely watched as the tech industry continues to evolve in the age of artificial intelligence.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional 

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Editah Patrick

Editah is a versatile fintech analyst with a deep understanding of blockchain domains. As much as technology fascinates her, she finds the intersection of both technology and finance mind-blowing. Her particular interest in digital wallets and blockchain aids her audience.

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