Hello, welcome to the ASUS Quarter 3 2025 Online Investor Conference. Today's conference will be held by ASUS Co-CEO Samson Hu, Shi Chang Hsu, alongside CFO Nick Wu. The conference will be divided into two parts. In the first part, CFO Nick Wu will start by outlining our quarter three financial results. Next, our two Co-CEOs will go over the operational strategies and business outlooks. For the second part, we will be conducting a Q&A session. You are welcome to raise any questions you might have in the panel on the left side of the web page. Questions will be collected and answered. Let us start with the presentation from CFO, Mr. Nick Wu.
Good afternoon, everyone. First, I'd like to apologize because, due to internal meeting delays, we've also had to delay the beginning of our earnings call today. I'm deeply sorry for this delay. Let us quickly enter the presentation proper, starting from page 5 of the PowerPoint. For page 5, it shows the consolidated income statement for ASUS. For brand revenue, ASUS reached $189.9 billion, which is a 21% year-over-year growth. This is, in fact, an all-time high for the ASUS brand revenue in a given single quarter. The growth behind this driver mainly consisted of enterprise-related segments, such as servers and commercial PCs. For operating income, it was around $8.4 billion, and net income reached $10.5 billion, translating to a quarterly EPS of $14.20. Gross margin for the brand came to 12.9%, and operating margin was 4.4%. Compared with quarter two, we saw that gross margin had improved meaningfully.
This is thanks in large part to a more stable operational environment, both in terms of tariffs and exchange rates stabilizing by quarter three. At the same time, we also saw that product shipments and sales performance either met or even slightly exceeded our internal targets, which is why we have been able to achieve such impressive results for quarter three. Turning to slide 6, it summarizes our non-operating income items. In quarter three, our interest income came to $600 million, with investment gains at $1.06 billion, FX gains at $1.2 billion, and dividend income $960 million. Altogether, the total non-operating income was $3.7 billion. Turning to slide 7, this shows the balance sheet. The points to note here would be the cash and cash equivalent, which stood at roughly $62 billion at the end of quarter three.
Now, given the record high revenue we have achieved this quarter, as mentioned before, we have also had to increase our working capital in terms of inventory, receivables, and payables to support these larger operating scales. As a result, we are now seeing that the inventory turnover is now averaging at 98 days, and the cash conversion cycle would be around 102 days, both remaining stable compared to the previous quarter. Turning to slide 8, we have the revenue mix. By business segments, we see that the systems business unit accounted for 53%, open platform 45%, and IoT 2%. In terms of breakdown by region, Asia accounted for 46%, Europe 32%, and the Americas 22%. Now turning to slide 9, which covers our outlook for quarter four, 2025. Now, it is important to point out that historically, quarter four is typically considered a flatter season.
This is partly because our main product lines, such as motherboards and graphics cards, and our leading markets in Asia-Pacific, they typically see that shipment will peak in quarter three and then flatten afterwards, which is to say that quarter three is typically a slower period compared to previous quarters. In addition, since quarter two, we have seen factors such as tariffs and macroeconomic uncertainty leading to demand distortions. This has included early points as well as front-loaded spending, which may have weighed on the potential for quarter four in terms of consumer sentiment.
From a product lifecycle perspective, our core gaming product lines entered its new cycle in the first half of 2025, which is to say that at the same time, the AI PC lifecycle is also likely to begin in the first half of 2026, resulting in quarter four becoming a sort of transitional phase between our two main product lines and their product lifecycles. Considering these factors, we expect that quarter four PC shipments to decline 10%-15% quarter- over- quarter, but remain roughly flat year on year. For components and servers, shipments may fall 5%-10% quarter- on- quarter, but grow 40%-50% year on year. Overall, ASUS expects to maintain strong annual growth momentum in quarter four as we continue to implement strategic and product initiatives to support continued growth going forward.
Looking ahead, we expect that we will be able to capture growth opportunities from upcoming cycles in AI PCs, in the gaming market, in the commercial segment, and servers. For the following product lifecycles, we expect that we will be able to achieve further growth. This concludes our financial presentation. Now I'll hand it over to our Co-CEOs to share ASUS's business outlook and strategic direction going forward. Thank you. Good afternoon, everyone. Friends from the institutional investment community and the media, thank you for joining the ASUS Quarter Three 2025 earnings call. I'm Co-CEO S.Y. Hsu, and I'll be sharing our strategies and outlook for the future. We saw that quarter three was a volatile market with many external headwinds. Nonetheless, our team's dedication and hard work were able to deliver another strong performance.
In quarter three, 2025, ASUS brand revenue reached $189.9 billion, which is up 21% year-over-year, and a record high for a single quarter. I'd like to once again thank all our colleagues for their efforts and our customers for their continued trust and support. Looking ahead, ASUS's growth will be anchored by three pillars: the gaming market, the consumer market, and the enterprise market, which of course includes the very fast-growing AI server business. As can be seen on this slide, the gaming market accounts for roughly 41% of our business, for the consumer market 29%, and the enterprise market 30%. We believe that this balanced mix supports both short-term growth and long-term diversification. We also see that all 3 segments delivered strong year-over-year growth, with the enterprise business doubling from last year, and gaming also posting positive annual growth.
This gives us strong confidence in achieving full-year revenue growth in 2025. It is also worth mentioning that while each product line is managed by a different business unit, these 3 pillars work synergistically to help ASUS strengthen its brand positioning while expanding our market share. Among them, gaming remains our most important business segment, enhancing our brand reputation and also yielding higher profitability on average, while the consumer market focuses on maintaining healthy margins while broadening overall market coverage. As for the enterprise segment, it is our fastest-growing segment and has been the key focus for our investments in recent years, driven by solid execution and robust demand for AI servers and edge computing solutions. We will continue to drive growth through innovation and customer commitment.
In summary, ASUS will remain user-centric, leveraging our excellence in products, services, and integrated solutions to deepen our presence in gaming, consumer, and enterprise markets. We strive to be a trusted global technology partner that consistently creates value for customers, partners, and shareholders. Next, let's talk about our AI product strategy. Our current strategy is Ubiquitous AI: Incredible Possibilities. ASUS is committed to building high-performance and reliable AI solutions in an ecosystem that supports industries rapidly adopt AI. We provide a full-stack AI offering, from cloud infrastructure to edge devices to end-user applications, allowing us to deliver on flexibility, speed, cost efficiency, and resource integration, ensuring customers achieve maximum benefit across all possible use cases. Our AI lineup also spans from large-scale AI servers to personal Copilot+ PCs and IoT edge devices, covering applications across creative workspaces, healthcare, industrial automation, and everyday AI scenarios.
I believe that this reflects our determination to help enterprises and consumers deploy AI technologies quickly and effectively. Through our solid AI expertise and our broad product portfolio that bridges cloud, edge, software, and physical AI, we believe we are building a complete AI ecosystem. Speaking of physical AI, it has been a hot topic in recent years. Now, we are going to put forth the idea that the rapid advances in AI will drive significant growth in AI-empowered physical devices in the coming years. ASUS was among the first companies to identify the strength early and began investing. For example, back in 2016, we launched the Zenbo home robot, and later in 2024, we announced our collaboration with Meta on developing smart glasses.
Nonetheless, commercialization of these AI products will take time, and we will begin to share more details and updates in future sessions once we believe they are ready to be announced. Next slide. Here we share a real-world example of how ASUS has applied AI internally and the tangible results it has produced. On our official e-commerce website, we launched a 24/7 AI-powered assistant. This AI assistant provides instant intelligence support and embodies our user-first philosophy. We believe that this will help enhance customer engagement while reducing overall operational costs and improving sales conversion. Since the implementation of this assistant, we have seen measurable outcomes such as increased personalized interactions. We have seen a seven-fold increase in product recommendation effectiveness and an eleven-fold rise in order conversion. At the same time, automation reduced service and maintenance costs dramatically.
Customer service costs per case dropped by 95% compared to human support. Overall, we're also seeing that page views have increased seven-fold, and user engagement time has risen eight-fold. We will continue to expand this AI assistant to additional regional sites over the coming quarters to deliver even better service worldwide. Next slide. As the leader in gaming ecosystems and the world's number 1 gaming brand, ASUS ROG continues to refine its products and cultivate a vibrant gaming community. Recently, ASUS partnered with Xbox to bring the console gaming experience seamlessly into the Windows handheld category, launching the ROG Xbox Ally. The product was named one of Time Magazine's best inventions of 2025 and has been widely praised by media outlets.
Based on feedback from early and first-gen Ally users, we increased battery capacity, refined the form factor, enhanced cooling, and revamped the user interface in collaboration with Xbox to bring the handheld experience closer to that of a dedicated console. The new model's powerful performance and smooth experience have earned rave reviews from consumers, media, and KOLs, achieving strong sales and further solidifying ROG's leadership in the premium gaming ecosystem. Beyond new products, we have deepened community engagement globally. At Gamescom in Cologne, we showcased the latest innovations and hosted on-site activities celebrating both handheld gaming and the 30th anniversary of ROG graphics cards. We saw that fans were thrilled by the creative exhibits and interactive experiences, both offline and online, reinforcing ROG's player-first philosophy and our spirit of innovation. Throughout Gamescom, ROG has successfully reignited global excitement, strengthened emotional ties with gamers, and highlighted our leadership in gaming innovation.
Next slide. This year marks the 30th anniversary of ASUS's graphics card business. Since launching our first card in 1996, we have continually led advancements in GPU technology, selling over 130 million units worldwide, enough to circle the Earth once. Each card embraces ASUS's passion for innovation and commitment to gamers around the globe. To celebrate this feat, we have unveiled the ROG Matrix GeForce RTX 5090 30th Anniversary Limited Edition at Gamescom in Cologne. The card features a record-breaking 2730 MHz boost clock. It showcases our engineering prowess and our deep collaboration with NVIDIA. Media and enthusiasts alike praised its design and performance. John Miller, NVIDIA's global head of GeForce Sales, joined us at Gamescom to commemorate our 30-year partnership, a relationship built on co-developing high-end GPUs, joint marketing, and collaborative design and community efforts that strengthen both brands.
We believe that this is the secret to our long-term success. We have co-developed these GPUs. We have developed joint marketing efforts, and that has allowed us to create integrated cooling solutions and host joint marketing events to help promote the brand and the card together. Some of the pictures you see on the slide capture our efforts perfectly. That concludes my presentation on the graphics card's business milestone. Now I'll hand it over to Samson for more details. Okay, thank you. Hello everyone, and greetings to everyone. I am Co-CEO Samson Hu, and I will be sharing key strategic directions for ASUS and the highlights of our quarter three performance. Let us begin with our core growth strategies. First, ASUS continues to maintain a strong leadership position in the consumer market. Both our consumer PCs and motherboards remain key contributors to the company's stable revenue and profitability.
Second, in the gaming segment, we continue to dominate the market as the world's number one gaming brand. Through our comprehensive product portfolio, continuous innovation, and immersive user experiences, alongside active community engagement, we have been able to further solidify our leadership position in the global gaming ecosystem. As Co-CEO Hsu mentioned earlier, we are aggressively expanding our enterprise business, including servers and commercial PCs, providing end-to-end integrated solutions that cover everything from commercial PCs to cloud-based AI servers and on-prem AI workstations supported by both hardware and software platforms. We are confident that this will become a major new growth engine for the company. Through these three pillars, we will enable ASUS to sustain steady growth and profitability while capturing the structural opportunities brought about by the AI era. Next slide. Now let us review the performance of each business group and our key strategic initiatives.
Starting with the Systems Business Group, we see that their performance in quarter three was quite solid. In the consumer PC segment, growth momentum came from rapid adoption of Copilot+ PCs, which saw over 80% quarter-on-quarter revenue growth. Copilot+ PCs now also account for over 25% of the non-gaming consumer notebook revenue. This clearly underscores the leadership position and momentum that ASUS has been able to achieve in this emerging category. In gaming PCs, ASUS now holds over 30% market share in the high-end segment, maintaining our dominant position. Turning to commercial PCs, we continue to strengthen our product offerings and technology innovations while expanding our enterprise channel footprint. Shipments in quarter three grew more than 50% year-on-year, setting the stage for commercial computing to become another key growth driver for ASUS in the coming years.
Overall, we will continue to leverage our innovative products, complete solutions, and our powerful brand image to keep advancing our leadership in the consumer gaming and commercial markets. Next slide. The Open Platform Business Group also delivered impressive results in quarter three, with revenue up 50%-60% quarter-on-quarter. Growth was driven primarily by the server and motherboard and graphics card businesses. Server revenue, in particular, more than doubled quarter-on-quarter, reflecting exceptional performances. ASUS was also among the first to launch the B300 and GB300 AI servers, showcasing our superior design capability and fast execution in early adoption. We also secured major orders from several global CSPs, significantly expanding our presence and competitiveness in the server market space. In the motherboards and graphics cards market, we continue to maintain our number one global market share position.
Graphics card revenue rose over 30% quarter-on-quarter, with the RTX 50 Series now making up over 80% of our product mix, driving market upgrades and delivering unparalleled gaming performance for gamers around the globe. Next, our monitor business also saw more than 20% quarter-on-quarter in terms of revenue growth. This was led by strong demand for high-end OLED gaming monitors, while we saw that shipments for this high-end market doubling. This reinforces ASUS's leadership in both premium display and gaming markets. Additionally, gaming accessories, which is an integral part of the ROG ecosystem, achieved 20% quarter-on-quarter growth, demonstrating robust demand from our player community and the strength of the overall brand ecosystem. Next slide. Moving to the AIoT Business Group, revenue grew 10%-15% in quarter three.
A key highlight for this group was the launch of the Ascend GX10 Compact AI Supercomputer, delivering petaflop-level performances and marking ASUS's leadership in hybrid AI computer. As one of the first OEM partners to roll out NVIDIA's DGX Spa system, the GX10 provides a powerful and cost-effective local AI development and testing platform for customers requiring high-performance, low-latency on-prem solutions. This product really embodies the vision that ASUS has of AI everywhere. This really showcases our leading position. I would also like to point out that at the Taipei Automation Exhibition this year, ASUS IoT showcased its end-to-end AI hardware and software integration under the theme "AI Everywhere: Empowering Industries." We co-exhibited with nine global partners, including close collaboration with Japan's industrial robotics leader, Epson.
We also highlighted solutions for smart retail and smart cities, achieving dozens of tangible partnerships and commercial opportunities, proving ASUS's successful real-world AI ecosystem deployment. Last slide. Finally, I would like to share that ASUS has received multiple international recognitions for corporate excellence in quarter three. For example, we were named one of Time Magazine's World's Best Companies, one of Newsweek's Most Trustworthy Companies, and one of Forbes' Best Employers recognition. I believe that these honors reflect ASUS's strong brand reputation. Our continued innovation and people-first corporate culture affirms that our standing in the global market and among consumers worldwide is without question. Thank you. Okay, thank you to our two Co-CEOs and CFO. We will now open the floor for Q&A. If you have questions, please submit them through the question icon on the webpage. We will collect all questions and respond after they have been collected.
Thank you. Okay, the first question comes from KGI Asia. Given the recent surge in memory and solid-state drive prices, how is the company managing its inventory levels, and what impact might this have on gross margins? Also, will these cost increments be passed on to the consumers? Okay, I think this is a highly poignant issue in the entire PC industry right now. Fundamentally, it stems from a demand-supply imbalance. On the demand side, as many of you might know, the need for DRAM capacity in servers, particularly AI servers, has risen sharply. On the supply side, the major DRAM suppliers have not significantly expanded their production capacity over the past few years, and that's what's driving the current situation. We began noticing this trend early in the year, including the tightening of DRAM supply and the upward price trajectory.
As a result, we started lengthening our component inventory cycle well in advance. In fact, by the end of, I believe, the 3rd quarter, we had roughly 2 months of component inventory and close to 2 months of finished goods inventory distributed among the retail channels, so around four months in total. This level of preparation means that the short-term impact, especially on quarter four operations, should be quite limited. We will continue to maintain close coordination with DRAM and NAND suppliers, and we'll continue to respond flexibly, including by further increasing inventory if needed. As for channel pricing, we will take into account the increased costs, the situation of our retail channel partners, and the end-user demand. We will adjust both our product mix and, where appropriate, product pricing if needed. Of course, this will all be a dynamic and highly flexible process.
Thank you. The next question comes from Morgan Stanley and several other institutional investors. Could you share the proportion of AI server revenue in the 3rd quarter and whether shipments of GB300 are proceeding as planned? Okay, let me address that. For those of you who have joined our previous earnings call, you may recall our earlier projections for AI servers, which was around 10%-15% of our total revenue. However, given how strong the entire AI server market has boomed and how that demand has been very consistent, you can see that our AI server revenue in quarter three grew by over 100% year-on-year. As of now, AI servers actually account for close to 20% of ASUS's total revenue. Of that, over 80% is directly related to AI server products.
We are still seeing that the GB300 and B300 shipments that many of you are concerned about is in a situation where we are among the first wave of suppliers. Shipments to our customers already began in September, and so far everything has gone quite smoothly. Looking ahead, we have set an aggressive internal target for continued growth in this area. Our base in the AI servers market is still relatively small, so we see plenty of room for rapid expansion and will continue to strengthen our presence in the market going forward. The next question also is from Morgan Stanley. Could you share the expected revenue contribution from the newly launched ROG Ally this quarter, as well as your shipment and revenue outlook for this product line throughout 2026? I'll take this one.
As many of you know, we introduced the first-generation ROG Ally 2-3 years ago as a market pioneer. Over the past couple of years, this new category, especially within the Windows ecosystem and creating this particular new category, has proven itself to be highly successful. We believe that we have achieved our original goals in terms of premium positioning and creating a new growth driver in the gaming segment. That is why we launched the 3rd generation ROG Ally last month. It featured deeper collaboration with Xbox. Since its launch, we see that the market response for it has been extremely positive. Particularly, there has been an appetite for the premium higher-end models exceeding our expectations. In fact, these high-end variants are currently in short supply.
We are working closely with key component suppliers to ramp up production and fill the demand gap that currently exists. Our goal for the ROG Ally is to remain a core pillar within the ASUS gaming portfolio, while also driving tangible revenue and profit growth for the company. For this quarter, currently, we are expecting the sales contribution of the Ally to come in at around $3 billion-$5 billion. Given the strong demand for the high-end models, we are confident that quarterly revenue could move toward the $4 billion-$5 billion range going forward. Thank you. Okay, the next question comes from JP Morgan. Could we have the CEO share his outlook for the PC market in 2026, as well as ASUS's expectations for AI PC segments next year?
Since AI PCs have been positioned as a key strategic focus for ASUS, could you also elaborate on your strategy and execution plans in this area? In terms of the overall PC market, we expect that the total market volume in 2026 will be more or less flat, if perhaps within ± 2% to 3%. As for the question directed towards AI PCs, I think it's worth mentioning that there are actually a few predictions that we're making because right now we have two different definitions. On the Microsoft stricter Copilot+ PC definition, it requires that the device has an NPU capable of 40 TOPS or more. We estimate that such systems will account for about 8%-10% of total shipments this year and should exceed 20% next year.
Under a broader definition from Intel, where any PC equipped with an NPU qualifies as an AI PC, then under that broader definition, the ratio is higher, close to 30% already this year and expected to reach 50%-60% next year. Initially, many in the market actually expected that AI PCs would be likely to trigger a major growth wave for the PC industry. Right now, we're seeing that adoption of AI-driven applications on PCs has been slower than anticipated. The growth trajectory is on the moderate side of things, though it's worth mentioning that moving from 30% to 50% in a single year is still a healthy pace. For ASUS, AI PCs remain a top strategic priority.
Based on cumulative data from quarter one to quarter three this year, ASUS holds over a 25% share of the global AI PC market, meaning that we currently rank number one in this segment. Having said that, we believe that the key to enabling AI PCs going forward is not just about hardware. The real differentiator and value add is in the software, how AI-empowered applications can deliver a fundamentally different user experience. That is what is going to ultimately push the market forward. It is certainly not something that ASUS can do alone, which is why we are working closely with upstream and downstream software partners, and in some cases, bundling quality AI software within our systems. That is really what we are hoping to achieve.
We're hoping that our in-house developed AI applications for AI PC lineups can further enhance the usability and appeal of the AI PCs and accelerate the growth of the overall AI PC market. The next question comes from East Spring. Could you share the company's view on tariffs and their impact on profitability, as well as your outlook for operating margin going forward? Okay, I'm going to take that question. In the 3rd quarter, we have not only just achieved a record high in brand revenue, we've also made two improvements in what we view as structurally positive changes in the long term. First, in terms of business mix, aside from our already strong consumer and gaming segments, we have successfully built up a third pillar in the enterprise market. This makes our overall business structure more balanced and resilient over time.
Second, supported by our record high operating scale in quarter three, our operating margin has already returned ahead of schedule to our target range of 4%-5%. We are very pleased to see this achievement achieved this early. As for the impact from tariffs, we see that most electronic products are still covered under the existing exemption rules. The impact of U.S. import tariffs has so far been quite limited. We are continuing to monitor developments surrounding the Section 232 semiconductor tariffs to see how future decisions and enforcement may unfold. Having said that, given the current political and economic climate, and with ongoing efforts from Taiwan's industry and government, we are cautiously optimistic that tariff pressure on Taiwanese companies should remain manageable in the grand scheme of things.
Once short-term factors such as tariffs and currency fluctuations are absorbed, we expect ASUS to maintain a sustainable operating margin in the 4%-5% range over the long term. Of course, this may naturally fluctuate within a reasonable band depending on product and market cycles. On a multi-year basis, say over a 1-10 year timescale, we aim to consistently deliver an annual operating margin in the 4%-5% range, which we consider to be reasonable. Okay, now we have a question from Trans Globe Life Insurance. The company just shared its shipment outlook for quarter four. If we look specifically at graphics cards and motherboards, what is the quarter-on-quarter target for that segment? Okay, let me clarify that.
In our earlier presentation, we discussed graphics cards together with AI server products, which may have caused some confusion since AI servers were growing much faster. Looking purely at standalone graphics cards, which seems to be what the question was about, we expect that quarter four shipments would be roughly flat quarter- on- quarter. Given the current market environment, we view that as a solid performance. The next question comes from TFB. For ASUS's server products, which countries are your main shipment destinations? Are your clients mainly tier 2 global CSPs? Also, do you have plans for additional investments or capacity expansion in the U.S. by 2026? Okay, I'll take that one. Historically, most of our server customers have been second-tier CSPs or NCPs based in Southeast Asia.
This year, our strong server growth came from new orders from tier 1 CSPs in Europe and the United States. Those orders are larger in scale, which explains the over 100% growth we achieved. As for U.S. production, that's definitely something that we are going to plan in response to policy requirements under the Trump administration. That is definitely for U.S. customers. Now, we will be manufacturing servers locally in the U.S., but whether we will expand that capacity will depend on order volume. If customer demand continues to rise, we will adjust accordingly. For now, it's too early to provide a definitive answer here and now. Thank you. Okay, now we have a question about GPUs. As with each new GPU generation, what's the market share that ASUS has achieved in the new RTX 50 Series graphics card?
Okay, and as mentioned previously, ASUS works very closely with NVIDIA, and that relationship has lasted for a very long amount of time, particularly for new product launches. That's something that ASUS takes very seriously and invests a lot of resources into in order to differentiate ourselves from other partners, which is why our market share has been strong following launches for each new GPU generation. For the newly released 50 series graphics card, our latest market data shows ASUS holding over 30% share, maintaining our number 1 position globally. This is also why our year-on-year graphics card revenue growth in quarter three exceeded 30%. Okay, the next question asks whether ASUS is seeing demand for AI inference servers on the enterprise side and what the shipment outlook and competitive strategy are for the new GX10 product mentioned earlier. Thank you.
Okay, and as we shared previously, the GX10 is a very high price-to-performance supercomputer with petaflop levels of computing power. For example, as many of you know, we are currently offering a configuration with 1 TB of memory priced at under $3,000. I think overall, this positions the GX10 as an exceptionally cost-effective system. Based on our current order visibility, most demand comes from organizations developing AI workloads locally. That would include entities like new startups, research labs at major tech companies, academic AI institutions, as well as smart manufacturing vendors. It is fair to say that the customer base for the unit is very diverse and quite broad. Given the current order momentum, we believe that annual shipments could reach several tens of thousands of units next year, anywhere from around 30,000-40,000. The number can really range.
It may be as high up to 80,000-90,000 systems year-wide, depending on market conditions. That's our current preliminary outlook. Thank you. The next question comes from Nanshan Life Insurance and several other institutional investors. You mentioned that graphics card shipments and motherboards for quarter four are expected to be roughly flat quarter- on- quarter, which implies that server shipments may decline sequentially. Could you explain the reasoning behind that and share your preliminary visibility or targets for the AI server shipments in 2026? I think it's fair to say that's a very good and very detailed observation. Thank you. Thank you. Right now, server sales are largely business to business, and every enterprise customer has its own deployment timeline for an AI server center because building AI server infrastructure is complicated.
It involves not just the installation of the server, but also data center readiness, power capacity, and cooling systems. Our shipment schedule would vary depending heavily on whether each customer's environment is ready for delivery or not. As for 2026, the AI server market remains extremely strong. In fact, with the recent DRAM and memory shortages in the second half of this year, all of that is linked in part to the aggressive investment for AI servers from CSPs. The surge in high-bandwidth memory demand has taken up a significant share of DRAM manufacturers' production capacity, leading to tighter PC and DRAM supply. With that in mind, we have set an aggressive internal growth target for AI servers in 2026, and we will continue to drive expansion in this segment.
Given the company's current capabilities and track record historically, we are confident that we can deliver a strong performance in 2026. Thank you. After reviewing all the questions, it seems that we have covered most of the topics everyone is interested in. Since we are out of time, we will now conclude today's earnings call. Let us invite our two Co-CEOs to share a few closing remarks. Okay, I think it's fair to say that this year has been a very turbulent year. Early on, there were tariff announcements from the Trump administration, followed by significant currency fluctuations in the 2nd quarter. As a result, our various business units have all been operating under significant pressure. Fortunately, we delivered very strong results in the 3rd quarter. In the past, ASUS was often viewed primarily as a consumer-focused company.
However, over the past two years, we have made meaningful adjustments to the company, and you can now see that in quarter three, our commercial business has grown significantly as a share of total revenue. At the same time, AI servers remain one of our key focus areas, and we will continue to allocate more resources aggressively to both segments to sustain our momentum and live up to expectations from our shareholders. Thank you to our media friends and partners for joining us today and for your continued attention, feedback, and support. As mentioned earlier, the impact of tariffs and exchange rate fluctuations on our operations has now been largely mitigated and brought under control. As we noted in previous briefings, ASUS has 2 major growth pillars in gaming and AI-related products, such as AI PCs and AI servers.
As today's results show, we achieved outstanding performance in the 3rd quarter, and we are confident that this momentum will carry over to the next year. For our commercial business line, it is something that we have been building for several years and also began showing strong results this year. This will remain another major growth driver for the company in the coming years. Looking ahead to 2026, as our CFO mentioned, we will be closely monitoring remaining tariff developments, particularly the Section 232 Semiconductor Clause and the supply situation for key PC components, which may introduce some uncertainty. We will stay agile and resilient in responding to these changes while leveraging innovation and product leadership to expand our share in both consumer and AI gaming segments.
Lastly, as a preview, at the upcoming CES early in January, ASUS will be unveiling a new lineup of products that will add fresh momentum to our 2026 growth. Thank you all once again for your participation and support today. Thank you.