Success stories in the age of artificial intelligence are not written only by silicon giants. 85-year-old Lin Tsung-chi, founder of Taiwan's King Slide Works, has become the island's wealthiest man, and his path to the top runs through a seemingly unremarkable niche—the production of furniture hinges and slides. Since the start of the year, the company's market capitalization has soared by nearly 280%, reflecting a tectonic shift in global computing infrastructure.
The secret behind this phenomenal growth lies in diversification. King Slide, beyond cabinet hardware, dominates a narrow but critically important segment—rail mechanisms for server racks. These components hold multi-ton equipment and enable its extension for maintenance without disrupting the delicate cooling system. Based on industry data, I estimate the company controls about 80% of the global market for high-performance server slides.
Margins Chipmakers Dream Of
Demand for this product is growing exponentially alongside the construction of data centers and the adoption of more powerful AI systems. The key point is the cost of the end product. When a single AI server rack is valued at millions of dollars, customers stop paying attention to the price of the slides, focusing solely on their reliability and quality. This has allowed King Slide to achieve a gross margin of 87% in the latest quarter. For comparison, Nvidia's figure is around 75%, and TSMC's is 68%. The company's executive vice president attributes this profitability to two decades of engineering development that created unique mechanisms for server equipment.
The financial result was not long in coming: Forbes estimates Lin's fortune at approximately $20.3 billion, allowing him to surpass Foxconn founder Terry Gou.
New Architectures, New Opportunities
Ahead lie even more interesting times. Hyperscalers are actively transitioning to their own AI accelerators, breaking established standards. Each new chip differs in dimensions, heat dissipation, and connectors, requiring a unique rack and, accordingly, unique slides. The shift to liquid cooling and increased equipment density is also driving design overhauls. Notably, the volume of gas power plants being built in the U.S. to power data centers has grown from 97 GW to more than 189 GW in six months—a colossal amount of new infrastructure that will require King Slide components.
The company is already expanding production in Houston to serve North American customers. 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 supplier pool. This will give data center operators leverage to pressure prices.
My view: The King Slide story is a vivid example of how "secondary" players become beneficiaries of technological revolutions. Investors should look more closely at companies providing the physical infrastructure of AI, not just chip manufacturers. However, the current 87% margin looks unsustainable: growing competition and buyer pressure will inevitably lead to its normalization, which will be a key risk for stock valuation in the medium term.