PC vendor Asustek Computer Inc (華碩電腦) yesterday said PC revenue this quarter would dip about 15 percent sequentially due to weak seasonal demand in Asia and the US, while downgrading the growth in the global PC market next year to a low to mid-single digit percentage, from its earlier estimate of a high-single-digit percentage expansion made in August.
“The Gaza conflicts pose new uncertainty, though the tension seems not to escalate for now,” Asustek co-chief executive officer Samson Hu (胡書賓) told investors yesterday. “Besides, the inflation in the US and Europe probably will not mitigate until the second half of 2024.”
The good news is that Microsoft Corp’s new Windows operating system and Intel Corp’s latest artificial intelligence (AI) PC solutions might help fuel replacement demand next year, Hu said.
Photo: Fang Wei-chieh, Taipei Times
In addition, Chromebook replacement demand is likely to emerge after consumers bought the the computers four years ago during the COVID-19 pandemic, he said.
Asustek has secured sizable server orders in Vietnam, India and Singapore in close collaboration with AI chip supplier Nvidia Corp, Asustek co-CEO S.Y. Hsu (許先越) said.
Last quarter, server revenue jumped 40 percent from a year earlier, Hu said, adding that the company is on track to achieve its five-year goal of growing server revenue by five times starting this year.
Half of the company’s servers are to have AI capabilities next year, Hsu said.
AI-enabled servers are expected to make up a low-single-digit percentage of the company’s total revenue this year, he said. The new business’s revenue contribution is expected to climb to a mid-single-digit percentage next year and to a double-digit percent in 2025, he added.
Asustek expects revenue from the electronic component business to increase 5 percent sequentially this quarter. Components such as motherboards accounted for 32 percent of total revenue last quarter, while PCs made up 67 percent.
Net profit last quarter more than quadrupled to NT$11.1 billion (US$343.3 million), the highest in seven years compared with NT$2.59 billion in the second quarter. On an annual basis, net profit soared 79 percent from NT$6.19 billion. Earnings per share skyrocketed to NT$14.9 last quarter from NT$3.5 a quarter ago and NT$8.3 a year earlier.
Last quarter, gross margin improved to 17.4 percent, the strongest performance in six quarters, compared with 12.5 percent in the second quarter and 11.6 percent a year ago, while the operating margin rose to 6.7 percent from 1.1 percent a quarter earlier and 2.3 percent a year ago.
Given last quarter’s financial results, Asustek said it is confident it could achieve a 4 to 5 percent operating margin in the long term.
The firm also said its inventories had returned to a healthy level of NT$120 billion last quarter, with the overall PC industry moving in an upward direction.
“AI PCs will be an important factor driving a new upcycle for the PC industry for multiple years to come,” Asustek chief financial officer Nick Wu (吳長榮) said yesterday.
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