Nuvoton Technology Corp (新唐科技), a microcontroller unit (MCU) maker, yesterday said it has vague order visibility, as macroeconomic uncertainty and ongoing inventory digestion have kept most customers on the sidelines.
Nuvoton became cautious about giving its gross margin outlook due to price competition and slower-than-expected recovery, Nuvoton chairman Su Yuan-mou (蘇源茂) told an investors’ conference yesterday.
“We have to make great efforts to keep the gross margin at 40 percent this year… Market demand is recovering at a slower rate than we thought. Besides, there is a competition factor to consider,” Su said. “I will be more optimistic about next year and the year after as our Japanese subsidiary is improving its costs.”
Photo: Grace Hung, Taipei Times
Nuvoton could miss its estimate from three months ago that gross margin would hit the bottom in the first quarter, and rebound after costs reductions and new product launches.
Nuvoton saw its gross margin hold steady at 40 percent last quarter, following three quarters of decline from 44 percent in the first quarter of last year.
Nuvoton is 51 percent owned by Winbond Electronics Corp (華邦電).
In response to a question about price pressure from Chinese competitors, Su said the company does not engage in the market share battle in China, as it focuses on supplying high-quality and high-performance chips — a different segment from its Chinese counterparts.
The company does not directly compete with Chinese MCU providers, as it has shifted its focus to supply MCUs used in industrial devices from consumer electronics, Su added.
The MCUs used in industrial devices and vehicles accounted for 50 percent of the company’s total revenue last quarter, up from 44 percent a quarter earlier, the company said.
New battery management ICs made at its Japanese fab would see growth, Su said, adding that MCUs used in vehicles and industrial devices would outperform chips used in consumer electronics such as smartphones and computers.
However, the company is monitoring whether the automotive supply chain would start adjusting inventory later this year as chip supply constraints have eased, Su said.
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