Taiwan Electronic Components & Equipment: Riding the AIDC BBU Growth Cycle; Initiate Dynapack at Buy

研报英文原文证据摘录

Taiwan Electronic Components & Equipment: Riding the AIDC BBU Growth Cycle; Initiate Dynapack at Buy

Essentials |

07 Jul 2026 04:00:10 ET │ 62 pages

Taiwan Electronic Components &

Equipment

Riding the AIDC BBU Growth Cycle; Initiate Dynapack at Buy

Angela Hsu AC

CITI'S TAKE +886-2-8726-9083

angela.hc.hsu@citi.com

We believe AI infrastructure is entering a new power architecture cycle,

where rising power density is driving a structural shift from centralized UPS

toward rack-level backup power. We expect this transition to significantly

increase both BBU content value per rack and industry penetration over the

next several years, creating a multi-year growth opportunity that remains

underappreciated by the market. We initiate Dynapack at Buy with TP

NT$800 (32x 2027E P/E) as we believe it is one of the most direct

beneficiaries of this structural transition. Boosted by accelerating BBU

demand, improving product mix and expanding profitability, we forecast

34% sales CAGR and 60% earnings CAGR over 2025-2028E.

AI power architecture is shifting toward distributed backup power, making BBU

increasingly essential — Battery Backup Unit (BBU) is emerging as a key enabling

technology in next gen AIDC as rack power density continues to rise. Compared with

centralized UPS, localized backup power provides faster ride-through capability,

lower power conversion losses and better scalability. We believe this represents a

structural evolution in AI power architecture, making BBU an increasingly standard

component in high-density AI racks.

We see both BBU content value and penetration expanding meaningfully as AI

power architecture evolves — Based on our bottom-up module approach, we

estimate BBU content value per AI rack rises from c.US$15-16K today for GB300