The history of the global artificial intelligence market continues to deliver surprises, and one of the most striking examples is the rise of Taiwan's King Slide Works. The company's 85-year-old founder, Lin Tsung-chi, unexpectedly topped the island's rich list, surpassing recognized industry giants. The reason for this triumph is not chip manufacturing, but seemingly modest mechanical components for server equipment.
King Slide, historically known as a manufacturer of furniture hinges and drawer slides, has made a breakthrough into the high-tech sector. The company has mastered the production of rail mechanisms for server racks—critically important elements that hold heavy computing units and provide convenient access to them without disrupting cooling systems. My assessment of the situation shows that this, at first glance, niche product has become a real "bottleneck" for the entire data center industry.
Market analysis confirms King Slide's dominant position: the company controls about 80% of the global market for high-performance server slides. The company's shares have surged nearly 280% since the start of the year, directly reflecting the booming demand for AI infrastructure.
Margins That Giants Dream Of
King Slide's financial indicators look sensational. In the last quarter, gross margin reached 87%, whereas a few years ago it stood at about 50%. For comparison, Nvidia's figure hovers around 75%, and TSMC's at 68%. This profitability is explained simply: when an AI server rack costs millions of dollars, clients are willing to pay for the reliability of slides without haggling over price.
King Slide's Executive Vice President, Jay C. Wang, attributes this efficiency to two decades of engineering development that enabled the creation of specialized mechanisms. According to Forbes, Lin Tsung-chi's wealth is estimated at approximately $20.3 billion, allowing him to surpass Foxconn founder Terry Gou.
New Architectures—New Opportunities
Even broader prospects lie ahead for King Slide. Cloud giants are actively transitioning to their own AI accelerators, which requires a complete redesign of server and rack structures. Each new chip differs in size and heat dissipation, and therefore requires unique slides. Examples like Google and Alibaba, investing billions in their own processors, only confirm this trend.
However, competition is intensifying. According to Daiwa Securities estimates, King Slide's share of supplies for Nvidia systems could drop to 75% next year, as the chipmaker diversifies its suppliers. The company is already expanding production in Houston, preparing to compete for the North American market.
My view: King Slide is a perfect example of how, in the AI era, not only algorithm creators win, but also manufacturers of "adjacent" infrastructure. However, betting on a single segment is risky: as soon as the market stabilizes and standardizes, the super-margin will inevitably shrink. The question is only who will be the first to adapt.