The history of Taiwanese business knows many unexpected rises, but the case of 85-year-old Lin Tsung-chi, founder of King Slide Works, stands out even against this backdrop. The manufacturer of furniture hinges and drawer slides unexpectedly became the main beneficiary of the AI boom, surpassing legendary Terry Gou of Foxconn in market capitalization. Since the start of the year, the company's shares have soared nearly 280%, and Lin's fortune, according to Forbes estimates, has reached $20.3 billion.
The secret to this success lies in diversification. King Slide, dominant in the furniture hardware market, simultaneously captured the niche of rail mechanisms for server racks. These seemingly unremarkable components are critically important: they hold heavy equipment and allow it to be pulled out for maintenance without disrupting cooling. Based on industry data, I estimate the company controls about 80% of the global market for high-performance server slides.
Margins on par with Nvidia
King Slide's financial metrics are striking. In the latest quarter, gross margin reached 87% — higher than Nvidia (about 75%) and TSMC (68%). The company's executive vice president, Jay C. Wang, attributes this profitability to two decades of engineering development. And this is not just talk: when an AI server rack costs millions of dollars, clients are willing to pay for the quality of the slides rather than skimp on them.
"When an AI server rack costs millions of dollars, clients care less about the price of the slides than their quality," noted Brady Wang, deputy director of Counterpoint Research.
Growth drivers and new challenges
Demand for King Slide's products will only intensify. Cloud giants are transitioning to their own AI accelerators, increasing equipment density, and implementing liquid cooling. Each new chip differs in dimensions and heat output, requiring a unique rack design. A telling example is Google, which received an option to purchase up to 58.97 million shares of Marvell Technology, and Alibaba, which is raising $10.2 billion for AI infrastructure development.
However, competition is intensifying. According to Daiwa Securities estimates, King Slide's share of slide supplies for Nvidia systems could decline to 75% next year due to an expanding supplier pool. Major data center operators are already preparing to use this to negotiate price reductions. Nevertheless, the company is expanding production in Houston, betting on the North American market.
My view: The King Slide story is a classic example of how "invisible" components become critically important in an era of technological revolutions. Investors should take a closer look at companies providing infrastructure for AI, even if their products seem far removed from high technology. An 80% market niche is a powerful barrier, but also a signal for regulators and competitors.