Novatek Microelectronics Corp (聯詠), which makes driver ICs for displays, yesterday reported that net profit last quarter rose 44 percent from a quarter earlier.
However, revenue this quarter would dip for the first time in three quarters as a weaker-than-expected macroeconomic outlook dampens demand for electronics, Novatek Microelectronics said.
Gross margin is to drop to the lowest in about three years to 38 to 40 percent this quarter from 41.7 percent last quarter due to unfavorable product portfolios and lower average selling prices, the firm said.
Photo: Grace Hung, Taipei Times
“Based on our observations, the macroeconomy is recovering at a slower rate than expected,” Novatek Microelectronics president Steve Wang (王守仁) told an online investors’ conference. “That affects the overall electronics demand profile. Overall demand looks conservative.”
“In China, economic rebound during the post-COVID-19 period fell short of expectations, as reflected in lukewarm sales during the 618 [June 18] shopping event,” Wang said.
“As most customers’ inventories have returned to normal levels, end-market demand is critical for order pull-in,” he said.
In such a conservative environment, customers become even more cautious about inventory management, and tend to place rush or short orders to rebuild inventory for the annual shopping season in the fourth quarter, he said.
Novatek Microelectronics said it expects revenue this quarter to drop by 3.96 to 7.26 percent quarter-on-quarter to between NT$28.1 billion and NT$29.1 billion (US$883.37 million and US$914.81 million), compared with NT$30.3 billion last quarter.
Sagging demand for premium notebook computers including gaming models would drag on driver ICs used in large panel displays, it said.
Demand for system-on-a-chip products for TVs and other devices would also decline this quarter on a sequential basis, it said.
The only growth area would be driver ICs used in OLEDs for small displays, including in vehicles and virtual-reality devices, the company said.
Novatek Microelectronics yesterday gave a positive outlook for next year, with growth spreading to all product lines.
It expects growth opportunities from its driver ICs used in smartphone OLED displays, notebook computers — due to a replacement cycle — and automobiles.
Last quarter, the company’s net profit expanded 44.61 percent to NT$6.87 billion, compared with NT$4.75 billion in the first quarter.
That was a decline of 19.03 percent from NT$8.49 billion in the same quarter last year.
Earnings per share expanded to NT$11.29 last quarter from NT$3.48 percent in the first quarter and down from NT$13.95 in the second quarter last year.
In a separate statement, Novatek Microelectronics said that revenue last month soared 40.92 percent to NT$9.68 billion from NT$6.87 billion a year earlier.
However, it declined 4.33 percent from NT$10.11 billion in June.
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