BenQ Corp (
BenQ's third-quarter earning are largely in line with the predictions of most analysts, but the sharp 3 percent decline in gross margin quarter-on-quarter came into the spotlight during yesterday's quarterly investor conference.
"We're surprised about the big drop in gross margin, though we already detected that the high-margin handset business has gradually been replaced by liquid crystal display [LCD] monitors and storage drives as the main engines for driving BenQ's profitability," said Grace Chen (陳星嘉), an analyst with Insight Pacific Investment Research (月涵投顧) in Taipei.
BenQ's gross margin slipped to 11.7 percent in the three months ended Sept. 30 from the 14.7 percent recorded in the second quarter and the 16.2 percent a year ago. The decline in gross margin has resulted in a reduction of the company's operating income.
Alex Liou (劉維宇), a comptroller at BenQ, attributed the declining margin to lower mobile phone shipments and a price cut aimed at digesting overstocked inventory. However, he expected handset shipments during the October to December period to rise to the level marked in the first quarter this year.
"The gross margin will bounce back to a certain level during the fourth quarter helped by rising handset prices and the launch of new handset models," BenQ chairman Lee Kun-yao (李焜耀) said.
Sales from the company's communications segment accounted for 15 percent of total sales, down from 20 percent during the second quarter.
"I believe BenQ suffered a lot from the price reduction as the gross margin for making handsets is much higher than other products, such as LCD monitors," Chou Chi-shian (周奇賢), an industry analyst with SinoPac Securities Corp (建華證券).
"Increasing shipments of cellphones and the launch of new models will help boost BenQ's gross margin, but the strength will be moderate. Thirteen percent would be a reasonable level," he said.
The bulk of BenQ's third-quarter earnings of NT$2.23 billion came from non-operating income, despite strong demand in LCD monitors and storage drives. Flat panel maker AU Optronics Corp (
BenQ expected to see revenue grow by 20 percent in the fourth quarter from the previous quarter due to demand from all segments including LCD monitors, LCD televisions and storage drives and launch of new products. That will represent a 45-percent gain from a year ago.
BenQ will have new handsets, flat-screen televisions and storage drives pitched in local market.
BenQ posted higher third-quarter revenue at NT$3.2 billion Wednesday. That represented a nearly 42 percent surge compared with NT$2.26 billion a year earlier.
"The growth will be even stronger if key component supply stabilizes," Liou said. "The shipment of LCD monitors will be capped by panel supply."
BenQ shares rose by NT$0.1, or 0.23 percent, to close at NT$43.3 on the TAIEX yesterday.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) halted shipments to a customer this month after its semiconductors were sent to China’s Huawei Technologies Co (華為), potentially breaching US sanctions, a government official said. The US slapped sanctions on Huawei in 2019, and expanded them the following year, over fears its technology could be used for Beijing’s espionage operations. The restrictions prevent TSMC from selling semiconductors to Huawei. However, TSMC discovered on Oct. 11 that chips made for a “specific customer” had ended up with the Chinese company, a Taiwanese official with knowledge of the incident said on the condition of anonymity. TSMC “immediately activated
US SANCTIONS: The Taiwan tech giant has ended all shipments to China-based Sophgo Technologies after one of their chips was discovered in a Huawei phone Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) suspended shipments to China-based chip designer Sophgo Technologies Ltd (算能科技) after a chip it made was found on a Huawei Technologies Co (華為) artificial intelligence (AI) processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. Huawei is restricted from buying the technology to protect US national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo said in a statement on its Web site yesterday that it was in compliance with all laws
TECH TITANS: Nvidia briefly overtook Apple again on Friday after becoming the world’s largest company for a short period in June, as Microsoft fell to third place Nvidia Corp dethroned Apple Inc as the world’s most valuable company on Friday following a record-setting rally in the stock, powered by insatiable demand for its specialized artificial intelligence (AI) chips. Nvidia’s stock market value briefly touched US$3.53 trillion, slightly above Apple’s US$3.52 trillion, London Stock Exchange Group data showed. Nvidia ended the day up 0.8 percent, with a market value of US$3.47 trillion, while Apple’s shares rose 0.4 percent, valuing the iPhone maker at US$3.52 trillion. In June, Nvidia briefly became the world’s most valuable company before it was overtaken by Microsoft Corp and Apple. The tech trio’s market capitalizations have been
Shares of Starlux Airlines Co (星宇航空) surged more than 53 percent on its debut on the Taiwan stock exchange yesterday. Starlux shares closed up 53.75 percent at NT$30.75 from its initial public offering price of NT$20 after retreating in late trading from a 60 percent rise. China Airlines Ltd (CAL, 中華航空) rose 0.90 percent to close at NT$22.35, while EVA Airways Corp (長榮航空) gained 0.40 percent to close at NT$37.70. In Taiwan, a newly listed stock is allowed to go beyond the 10 percent maximum increase or decline in its first five trading sessions. At the listing ceremony, Starlux chairman Chang Kuo-wei (張國煒) said