Gentex Cuts 2026 Margin Forecast as AI Data Center Demand Tightens Memory, PCB Supply

Gentex (GNTX-US) lowered its full-year 2026 gross margin guidance to 34%–34.5% from 34.5%–35.5%, citing rising costs for precious metals, memory and other electronic components as AI data center buildouts divert upstream materials and capacity away from automotive electronics. The company expects $10 million to $15 million in additional fourth-quarter costs, with customer compensation unlikely before the first half of 2027. Third-quarter revenue fell to $648 million from $655 million a year earlier; gross margin slipped to 33.4% from 34.4%, and net income dropped to $90.6 million from $101 million. Management said on its earnings call that memory and component shortages have forced higher purchase prices, while some PCB materials and capacity have shifted to the data center market. Gentex is building inventory, securing supply and redesigning products to mitigate the impact. Full-year 2026 revenue guidance was cut to about $2.65 billion from $2.65 billion–$2.75 billion; the 2027 outlook of $2.8 billion–$2.9 billion was maintained. Automotive business accounted for about 85% of third-quarter revenue.