00:00Our supply chain strategy is built around flexibility and diversification.
00:07So we are working very closely with our manufacturing partner to ensure that we have production capabilities around the world, including the U.S.
00:19That's very important. And that's why we also are very carefully and very closely monitor the data situation about the tariff policy and assess the impact to our supply chain.
00:35What's the level of tariffs that you anticipate as a business? What's the base case scenario that you see?
00:41I think, you know, the recent U.S.-China trade deal announcement is a positive development.
00:49So I think we are somewhat competent about the future of the global trade deal stability.
00:57However, I think the tariff policies are still continuing to shift.
01:02Earlier this year, we had an interview with ASUS and you were talking about sending products to the U.S. to get ahead of the tariffs in the fourth quarter of last year.
01:12Where are those inventory levels now and how much of a buffer do you have as well?
01:16OK, that's an interesting question.
01:19Actually, we prepare those inventory levels since last quarter.
01:25And usually we build the inventory level between three to six months, depending on different product category.
01:36So then how much of a safety net do you have right now? How many months?
01:40Oh, still three to six months at current moment.
01:42Without having any sort of price changes to your products?
01:46Well, in terms of price, right?
01:48To be honest, we expect some price increase maybe need to pass on to our consumers, especially for those products reliant on effective components.
02:05And at the same time, you know that we have long been diversifying our manufacturing footprint to address the tariff concern.
02:14And naturally, this will also bring extra logistic costs.
02:20So that's why we have started the price adjustment with our channel partners based on the condition to maintain our margin balance and based on the market acceptance.
02:33So what's the increase you're expecting then on the price and which products as well, do you think?
02:39Yeah, the price increase really quite a little bit depending on different product category.
02:48Could you give sort of a range then of the percentage that you're expecting to increase?
02:52It highly depends on the actual logistic costs and the possible tariff rate going to import.
03:01So usually it's 5% to 10%.
03:055% to 10% price increase.
03:07Okay.
03:08Yes.
03:08And is that just for consumers in the U.S. or do you need to also apply this globally to try and offset?
03:14Only in the U.S.
03:15Let's talk about the demand for AI servers or AI PCs as well because these are two different business lines for you.
03:22What are you seeing right now in terms of customer or business appetite?
03:26Well, you're asking about the demand of AI, such kind of, okay.
03:31We continue to see strong demand for AI.
03:35That's because, you know, AI is no longer optional for business since it really helps them to improve
03:43operation efficiency and to stay competitive.
03:46Agendic AI though, that was a big topic for 2025 and this move to the edge that we were going to be seeing
03:53or we will see in smartphones and PCs.
03:56We haven't really seen it, though, spark an upgrade cycle just yet, it seems.
04:02Well, I think it still takes time to have the Agendic AI application into every edge devices,
04:11including AI PCs, smartphones and edge computing devices.
04:15I think it still takes time, but it's ongoing.
04:18So we are optimistic about its future.
04:21If you think, though, about the timeline for this.
04:24I think maybe one year, yeah, one year or two year because the hardware capability already there,
04:32but it still depends on the third party application developer to develop
04:38those applications based on Android AI technology.
04:41What sort of demand are you forecasting then for this year or sales for this year,
04:46if you don't see that move to the edge or in-device AI happening until 26 or 2027?
04:53Well, I think the market momentum still highly depend on the driving factor from the industry,
05:03but also highly affected by macroeconomic factor.
05:08So overall, you know, original estimation of the market growth rate for the PC industry is around 5%.
05:18But right now, because the terror policy uncertainty,
05:21I think right now, most estimation already are reduced to 1% or 2% or even only threat.
05:31And that's also what you're expecting for ASUS for this year?
05:35Yes, we have the same perspective.
05:37Yeah.
05:38The PC sales...
05:39The PC sales growth rate will be low single digit percent.
Be the first to comment