Advanced Energy's New Thailand Plant Is Already Shipping To Two Data Center Customers, CEO Says
CEO Steve Kelley says the plant adds capacity "through 2029 easily," while component shortages are built into the fourth-quarter outlook.
Advanced Energy's new Thailand factory is already turning out products for two data center customers, CEO Steve Kelley told analysts on the company's third-quarter earnings call on Monday. Advanced Energy, which makes precision power-conversion products for chip equipment, data centers, industrial and medical gear and telecom networks, reported record revenue of $696 million for the quarter.
A flagship plant ramps up
Kelley said he visited the plant a couple of weeks ago and saw products coming off the line for two different data center customers, so they are already qualified. He expects two of the company's top semiconductor customers to qualify within the next two to three months.
The factory covers 500,000 square feet on a single floor, which he called "by far our biggest factory." After the visit, he said, he has "no doubt" it can become the largest and most efficient plant in the network.
The company is also lifting output in the Philippines, Malaysia and Mexico. Together the sites put it on track to expand revenue-generating capacity to over $5 billion by the end of 2028, management said. CFO Paul Oldham said capital spending will stay elevated through 2027, after coming in toward the low end of a $180 million to $195 million range this year.
Capacity is no longer the bottleneck
Asked by a KeyBanc analyst whether engineering bandwidth becomes the scarcer resource, Kelley said engineering has always been the critical path. Most machines the company buys are available within three to six months, he said, and he described capacity as enough to "get us through 2029 easily." Some opportunities go unaddressed because of engineering limits, he added.
Kelley also said second-wave data center customers, meaning everyone except the hyperscalers, could together produce more than $300 million in yearly revenue, though not next year but by 2029.
Shortages are in the forecast
Parts are the constraint. Responding to a Needham analyst, Kelley said the company has faced supply problems most of the year and has softened them with strategic inventory and surge production. Some shortfalls cannot be mitigated, he said, and those are built into the fourth-quarter and 2027 forecasts. The trouble spots are isolated components, particularly integrated circuits, with some constraints on printed circuit boards and specialty ceramics.
For the fourth quarter, the company forecasts revenue of about $735 million, plus or minus $25 million, and adjusted earnings of $3.90 a share, plus or minus 30 cents. It now expects 2026 revenue growth of around 40%, up from a prior target of low to mid 30%.
Oldham said 2027 growth is directionally around 30%, up from over 20% last quarter. Demand could run higher, he said, but supply uncertainty makes firm guidance difficult.
The next marker is Kelley's own: whether the two top semiconductor customers qualify the Thailand plant within two to three months.
Sources
- Advanced Energy Industries (AEIS) Surpasses Q3 Earnings and Revenue Estimates — Yahoo Finance
- Advanced Energy Non-GAAP EPS of $3.65 beats by $0.59, revenue of $696.4M beats by $49.29M (NASDAQ:AEIS) | Seeking Alpha — seekingalpha.com
- Advanced Energy Industries, Inc. (AEIS) latest stock news and headlines – Yahoo Finance — Yahoo Finance
- Should You Buy, Sell, or Hold AEIS Stock Before Q3 Earnings Release? — Yahoo Finance
- Advanced Energy Q3 2026 Earnings Preview (NASDAQ:AEIS) | Seeking Alpha — seekingalpha.com
