Yageo Corp (國巨) yesterday said that its revenue would drop by a low single-digit percentage this quarter from a historical high last quarter, as customers and distributors are holding back demand to concentrate on inventory digestion due to flagging smartphone and notebook computer demand.
The world’s biggest supplier of passive components expects to take three to six months to reduce its inventory of commoditized passive components to a normal level of 100 to 110 days, from 130 days currently.
Yageo would reduce its factory utilization rate for standard passive components to about 60 percent this quarter, from about 70 percent last quarter, to reach its inventory goal by the end of this year or in the first quarter of next year, it said.
Photo: Chang Hui-wen, Taipei Times
Passive components such as resistors, capacitors and inductors are integral parts of a motherboard.
“The second half of the year should continue to be challenging. The inventory situation has not really improved. The standard segment continues to weigh on operations,” Yageo chief financial officer Eddie Chen (陳彥松) told investors. “The book-to-bill ratio for premium products stands at about one, but below one for standard products”
On the bright side, Yageo still sees solid demand for premium passive components used in automotive, industrial and networking devices, leading to high utilization of those product lines at 90 to 100 percent, Chen said.
Those premium passive components accounted for 75 percent of Yageo’s revenue last quarter.
Gross margin would this quarter slide to a level similar to the first quarter at 38.1 percent, compared with 38.8 percent in the April-to-June period, Chen said.
Operating profit margin would also be similar to the first quarter at 24.8 percent, a slight decline from 25.2 percent last quarter, he said.
Yageo attributed the stable margins to its persistent efforts to broaden its product portfolio over the past few quarters.
Thanks to its diverse offering, Yageo should be able to “resist” the pricing pressure in the second half of this year when the market is expected to slow, Chen said.
The company said it would keep its capital expenditure budget for this year unchanged at NT$10 billion to NT$11 billion (US$334 billion to US$367.4 billion), as it believes the industry is still on track to grow in the long term.
Yageo reported NT$5.93 billion in net profit for the quarter ending June 30, surpassing its share capital of NT$5.44 billion. That represented an annual decline of 6.4 percent from NT$6.33 billion and a quarterly drop of 5.1 percent from NT$5.24 billion.
Earnings per share fell to NT$11.05 last quarter from NT$12.82 percent in the second quarter of last year and down from NT$11.59 in the first quarter of this year.
The company had to pay a higher income tax bill due to undistributed earnings of about NT$600 million last year, which led to a NT$1 drop in earnings per share last quarter, it said.
Gross margin and operating profit margin improved on a quarterly basis, thanks to a better product mix and greater revenue scale, it said.
Revenue expanded 13 percent year-on-year and 3.9 percent quarter-on-quarter to NT$31.32 billion last quarter, a new record.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San