Sysgration Ltd.

Sysgration Ltd. (5309) announced consolidated revenue of approximately NT$294 million for June 2026, down 4.53% MoM but up 4.19% YoY. Cumulative revenue for the first half of 2026 reached approximately NT$1.77 billion, representing a 3.77% YoY increase and marking a record high for the same period in the company’s history. Although June revenue edged down slightly from the previous month, overall performance remained at a high level. Growth was mainly driven by volume shipments of IPC (industrial PC) and drone flight control system products, with related revenue doubling from the same period last year. This reflects rising demand in the drone market, which has supported the optimization of the company’s product mix and significantly increased the contribution from high-value-added product applications.

In June, IPC and drone-related products accounted for nearly 40% of revenue, standing roughly on par with TPMS (tire pressure monitoring systems), which contributed approximately 40%. The remainder came from power and energy system products, underscoring the company’s three growth engines— TPMS, IPC and drones, plus power and energy systems — as key drivers of both operating resilience and growth momentum. Among these businesses, the drone flight control system segment benefited from steady order pull-in by U.S. customers, with shipment scale continuing to expand. Demand momentum is expected to remain highly sustainable.

Often regarded as the “brain” of a drone, the flight control system integrates flight attitude, sensor signals, communication commands, mission control and safety management. It directly affects a drone’s flight stability, response speed and mission reliability. In applications such as public safety, inspection, surveying and mapping, and special missions, customers place greater emphasis on stability, weather resistance, long-duration operation capability, and customized integration of flight control systems. These requirements make flight control systems and industrial PC platforms key segments with higher technical barriers within the drone supply chain, positioning them as important growth drivers for Sysgration going forward.

The company stated that it has long been committed to developing its IPC and AI design and manufacturing capabilities, with expertise spanning ruggedized hardware design, customized motherboard development, power management, communication module integration, and high-reliability mass production. This enables Sysgration to extend its IPC technologies into drone flight control systems, ground control systems, and edge computing modules. As drone applications increasingly integrate image recognition, real-time data processing, AI edge computing, and mission-oriented control, Sysgration is further extending its AI edge computing technologies on the back of years of self-developed IPC computing capabilities. These capabilities have become an important foundation for the core technologies of drone flight control systems, while also helping the company establish differentiated advantages from its peers.

Institutional investors noted that Sysgration’s IPC and drone-related products generated nearly NT$800 million in revenue last year, with growth this year expected to reach up to 50%. As flight control products continue to scale, GCS (ground control station) shipments ramp up in the second half of the year, and BBU (battery backup unit) products gradually enter mass production, the company’s three growth engines are expected to gain further traction, making its operating performance in the second half worth watching.

Sysgration’s Consolidated Revenue Summary for June 2026:  Unit: NT$ million; ％

About Sysgration Ltd.

Pegatron (TWSE: 4938) and Sysgration Ltd. (TPEX:5309) jointly announced today that they have entered into a strategic partnership. Sysgration disclosed on the 5^th that its board of directors approved a private placement of common shares at a price of NT$55 per share. In the transaction, Pegatron will subscribe for 22,000 lots, while other institutional investors will subscribe for a combined 3,000 lots, bringing the total to 25,000 lots. The private placement is expected to raise total proceeds of NT$1.375 billion.

Electronics manufacturer Pegatron has joined forces with Sysgration in a strategic alliance to aggressively expand into the AI server market, with 100% of production to be based in the United States. The partnership further extends their AI footprint, with mass production and shipments from their U.S. facilities expected to begin in the second half of 2026. “We both agree that AI servers manufactured in the U.S. must be delivered more quickly. Together, we are jointly targeting CSP customers,” the companies said, highlighting a closely aligned strategic roadmap. Through resource integration, the partners aim to foster the development of an industrial cluster in Texas, enable near-site delivery, build a scalable and resilient global operating platform, and reshape the global AI order landscape—positioning “Made in the USA” as a core competitive differentiator in securing AI server orders.

The private placement is expected to generate group-wide synergies across five key areas. Most notably, the partnership will deliver complementary collaboration in AI servers. Second, the two companies will leverage cross-technology cooperation in automotive electronics, building on proven execution capabilities. Third, Pegatron and Sysgration will jointly pursue untapped customers in the industrial PCs market through complementary sales and go-to-market strategies, aiming to capture additional market share. Fourth, the collaboration will reinforce their leading position in the drone market across the manufacturing and supply chain ecosystem. Most importantly, the partnership will enable Sysgration to benefit from joint procurement and cost optimization, enhancing economies of scale in manufacturing. Both parties expect M&A-like synergy effects to emerge meaningfully as these initiatives are executed.

In the AI infrastructure race, power availability is becoming scarcer than compute capacity. Sysgration is currently the only supplier manufacturing BBUs in the United States. Its Plano, Texas facility is scheduled to begin mass production and shipments in the second half of this year. The fully automated production lines will support a comprehensive product portfolio, including 11 kW, 7 kW, 5.5 kW, and 3 kW BBUs, as well as full-specification HVDC solutions. Order visibility from CSP customers extends through 2028, highlighting strong and durable demand. As power architecture upgrades accelerate across the industry, competition is intensifying; however, BBUs remain one of the most critical and hardest-to-substitute components in AI server systems. Shipments to Sysgration’s CSP and server OEM customers are expected to ramp sequentially on a quarterly basis, with structurally inelastic power demand driving multi-fold growth momentum.

Pegatron’s Texas manufacturing facility in the United States is expected to be completed by March 2026, followed by pilot production. The facility will focus on U.S.-based manufacturing across a broad range of applications, including AI server contract manufacturing, automotive electronics, and industrial PCs. Looking ahead, Pegatron expects its overall AI server revenue to continue benefiting from strong growth in GPU server demand this year, while simultaneously capturing meaningful business opportunities in the ASIC server segment.

About Sysgration Ltd.