Electronic components supplier Lite-On Technology Corp (光寶科技) yesterday reported that net profit grew 18 percent year-on-year to NT$3.11 billion (US$102.29 million) last quarter, translating into earnings per share of NT$1.34 — the most in three years.
Gross margin and operating margin increased to 16.2 percent and 6.7 percent from 15.8 percent and 6.2 percent respectively, due to operational efficiency, better supply-chain management and an improved product mix, the company said.
However, third-quarter revenue dropped 10 percent year-on-year to NT$48.16 billion, as Lite-On’s three main business segments experienced declines.
Revenue from the company’s storage segment, which contributed 13 percent of total revenue last quarter, declined 35.43 percent annually to NT$6.25 billion, company data showed.
Lite-On vice chairman and chief operating officer Warren Chen (陳廣中) blamed the disappointing results on the company’s solid-state drive (SSD) business.
Its sale to Toshiba Memory Holdings Corp for US$165 million was approved more than two months ago. The deal is expected to be completed by April next year.
“Supply was much higher than demand [for SSDs] in the first two quarters this year,” Chen said, adding that falling prices of NAND flash memory chips over the past 18 months have further dampened sales.
The SSD business recovered slightly last quarter due to the rising popularity of gaming devices, but is expected to dip again this quarter as market demand has peaked for the year, he said.
The company’s optical disk drive business is expected to report flat performance this quarter, although Chen said he was hopeful that this segment would improve next year on the back of increasing demand for data centers.
The information technology (IT) segment, which contributed 67 percent to Lite-On’s revenue, reported a slight annual drop in sales to NT$32.13 billion last quarter.
However, growth in demand in various areas such as cloud-based computing, artificial-intelligence appliances and gaming devices would benefit the segment this quarter, Chen said.
In May, the company began mass production of networking devices, as well as other IT products, at its Kaohsiung plant and has another plot in the city standing by “just in case” the trade conflict between the US and China exacerbates, he said.
“Although the trade conflict has only affected our revenue by a single-digit percentage this year, we are still closely monitoring any changes or resolutions that might come about within the next two months,” Chen said.
Sales growth in the company’s automotive electronics business stalled last quarter.
“Our clients have been launching new models at a slower pace, as demand in the automotive market is flagging,” Chen said.
The firm’s optoelectronics segment — which is composed of automotive electronics, LED components and lighting products, as well as camera modules — reported that revenue decreased 7.6 percent annually to NT$7.37 billion last quarter, contributing 15 percent to total revenue.
Meanwhile, Lite-On is expanding its Vietnamese plant as it looks to relocate production of labor-intensive products from China, Chen said, adding that mass production is expected to start by the end of next year.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
RSS