Contract electronics manufacturer Inventec Corp (英業達) yesterday posted its best profit in nine quarters as its gross margin continued to increase, despite a decline in revenue.
The company, which produces notebook computers, servers and smart devices for brand clients, reported a net profit of NT$1.99 billion (US$63.35 million) in the fourth quarter of last year, up 6.08 percent from the previous quarter.
Year-on-year, profit was up 42.64 percent, Inventec said in a regulatory filing.
Photo: Fang Wei-chieh, Taipei Times
While revenue in the October-to-December quarter fell 6 percent quarterly and 5 percent annually to NT$128.07 billion, gross margin improved to 5.7 percent, the highest since the first quarter of 2016 when it was 5.92 percent, company data showed.
Inventec attributed the increase in gross margin to an improved product mix — a higher contribution from artificial intelligence (AI) servers and lower shipments of notebook computers — and clients’ nonrecurring engineering fees, which refer to one-time gains from designing, developing and testing new products.
Earnings per share (EPS) were NT$0.55 last quarter, the highest since the third quarter of 2021 when the company made NT$0.78 per share.
Overall, Inventec reported total net profit of NT$6.13 billion last year, up 0.03 percent from 2022, or EPS of NT$1.71, on par with the previous year.
Full-year revenue decreased 5 percent to NT$514.75 billion, but gross margin rose 0.3 percentage points to 5.1 percent, the highest in six years, the company said.
The company’s board of directors has proposed distributing a cash dividend of NT$1.5 per share, Inventec said in a separate filing with the Taiwan Stock Exchange.
If approved by shareholders on June 12, the planned cash dividend, would represent a payout ratio of 87.7 percent.
Based on the company’s closing share price of NT$55.6 yesterday, it would translate into a dividend yield of 2.7 percent.
Inventec expects notebook computer shipments this quarter to be flat or slightly down from last quarter, the company said, adding that shipments next quarter would likely decrease by a high single-digit percentage due to shipment delays on some commercial models.
The company also expects server shipments to grow every quarter this year, with annual server revenue forecast to register double-digit percentage growth from last year, although analysts have said that the new US chip export controls for China might cap Inventec’s AI server sales.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS