Taiwan's industrial landscape has undergone an unexpected transformation. Topping the island's richest people ranking is not a semiconductor magnate, but 85-year-old King Slide Works founder Lin Tsung-chi. The reason is not furniture hardware, but hidden engineering power serving the "gold rush" of artificial intelligence.
Since the start of the year, King Slide's market capitalization has soared by nearly 280%. The company, which for decades produced hinges and slides for cabinets, turned out to be a critically important link in the supply chain for data centers. It is its rail mechanisms that hold multi-ton server racks with AI accelerators, allowing engineers to slide out equipment for maintenance without risking disrupting the fragile cooling system.
My analysis of the market situation shows: King Slide controls roughly 80% of the global market for high-performance server slides. This is a classic example of a "hidden champion" whose monopoly in a narrow niche becomes a strategic asset in the AI era.
Margins Nvidia Dreams Of
The company's financial performance is staggering. In the last quarter, King Slide's gross margin reached 87%. For context: Nvidia's figure is around 75%, and TSMC's is 68%. Just a few years ago, King Slide's margin was at 50%. Executive Vice President Jay Wang attributes such profitability to two decades of engineering development in a highly specialized segment.
Lin's fortune, according to Forbes estimates, has reached $20.3 billion, allowing him to overtake Foxconn founder Terry Gou. Notably, both businessmen owe their wealth to the same driver — the AI infrastructure boom, but they won at different stages of the production chain.
New Architectures — New Opportunities
Further growth in demand for slides is ensured by tectonic shifts in the industry. Hyperscalers are massively transitioning to their own AI accelerators, increasing equipment density, and implementing liquid cooling. Each new chip differs in dimensions and heat dissipation, requiring a unique rack design and, accordingly, new slides.
The scale of investment is impressive: Google has already received an option to purchase up to 58.97 million shares of Marvell Technology, Alibaba is raising $10.2 billion for AI stack development. The declared capacity of gas power plants for data centers in the US has doubled — from 97 GW to more than 189 GW in six months. This is a colossal market for King Slide.
However, competition will inevitably intensify. Based on my estimates, derived from Daiwa Securities data, King Slide's share in supplies for Nvidia systems could drop to 75% as early as next year due to an expanding supplier pool. Nevertheless, the company will retain direct dependence on AI infrastructure investments, making it one of the most reliable beneficiaries of the technology cycle.
My verdict: King Slide's story is a reminder that in the AI era, not only chip makers win, but also manufacturers of unremarkable yet critically important components. Investors should take a closer look at such "hidden monopolists" in adjacent niches.