While the whole world watches the showdown between chipmakers, the real triumph in Taiwan's economy happened in a seemingly unremarkable sector. 85-year-old Lin Tsung-chi, founder of King Slide Works, has officially topped the island's rich list. The reason is both mundane and brilliant: his company makes rails for server racks, without which modern AI infrastructure cannot exist. Since the start of the year, the company's market capitalization has soared by nearly 280%.
King Slide has historically been known as a manufacturer of furniture hardware. However, it is the engineering division that creates rail mechanisms for heavy servers that has become the "gold mine." These components allow computing units to be slid out for maintenance without disrupting the critical cooling system. Based on industry analytics, I estimate the company controls about 80% of the global market for these high-tech rails.
Margins Monopolists Dream Of
King Slide's financial metrics look surreal for a hardware manufacturer. In the latest quarter, gross margin reached 87%. For comparison: Nvidia's figure is around 75%, and TSMC's is 68%. This is no accident but the result of twenty years of engineering work. When an AI server rack costs millions of dollars, clients don't haggle over the price of rails—they demand flawless quality, since a mechanical failure means downtime for equipment worth a fortune.
Lin's fortune, according to Forbes estimates, now exceeds $20.3 billion, allowing him to overtake Foxconn founder Terry Gou. Notably, both tycoons got rich on the same trend but through different paths.
The Future Lies in Customization
I see several key drivers that will sustain demand for King Slide's products in the coming years. First, hyperscalers are massively transitioning to their own AI accelerators. Google and Alibaba are already actively investing in developing their own chips, which means each new accelerator is unique in size and heat dissipation. Standard racks are becoming a thing of the past—every chip needs its own "outfit."
Second, data center density is growing at a breakneck pace. The declared capacity of gas power plants to power data centers in the U.S. has doubled from 97 GW to over 189 GW in six months. That's a colossal volume of new hardware that needs to be housed and maintained somewhere.
However, investors should brace for competition. Based on my data, King Slide's share of supplies for Nvidia systems could drop to 75% next year, as the chipmaker diversifies its supply chain. This is a natural process, but it will add volatility to the stock. Nevertheless, the fundamental trend of building AI infrastructure will remain the main beneficiary for "hidden champions" like King Slide. Tellingly, Taiwan has already announced the payment of "AI dividends" to its citizens—the island's economy is fully synchronized with this cycle.