Compal Electronics Inc (仁寶), the world’s second-largest contract notebook maker, yesterday saw its third-quarter net income drop 40 percent from the previous quarter despite a 68 percent increase in its first nine-month earnings year-on-year.
The Neihu (內湖), Taipei City-based company said in an e-mailed statement that net income from January to last month rose to NT$18.8 billion (US$608.3 million), or NT$4.37 in earnings per share, from NT$11.18 billion, or NT$2.88 a share, a year earlier.
Revenue increased 57.78 percent to NT$637.41 billion in the first nine months from NT$404 billion a year ago, while gross margin fell to 4 percent from 4.7 percent, the statement said.
Compal did not elaborate about the substantial increases in net income and revenue during the first three quarters, nor did it provide a detailed breakdown of the figures quarter by quarter.
By subtracting the company’s first-half net income of NT$14.95 billion, its third-quarter profit stood at NT$3.85 billion, which was 40.24 percent lower than the NT$6.44 billion posted in the second quarter.
On an annual basis, the third-quarter profit was 24.51 percent lower than NT$5.1 billion a year earlier, according to the company’s financial data.
Gross margin fell to 3.8 percent in the third quarter, from 4.01 percent in the second quarter and 4.21 percent in the first quarter. Revenue also dropped to NT$203.7 billion from NT$217.06 billion in the previous quarter.
Compal’s falling gross margin and revenue came as the company’s notebook shipments declined 4.9 percent to 11.7 million units in the third quarter from 12.3 million units in the second quarter at a time when worldwide laptop purchases were negatively affected by tablet devices such as the iPad, market research firm Gartner Inc said in a report earlier this month.
On Sept. 1, Compal president Ray Chen (陳瑞聰) told reporters that he expected third-quarter shipments to fall by less than 10 percent before experiencing a rebound in shipments during the current quarter.
Compal had said earlier that it aimed to ship 50 million notebooks this year, compared with its original goal of 48 million units and the 37.9 million units it shipped last year.
The company is scheduled to hold an investors’ conference next month to offer more detailed observations about the notebook industry and its business forecast for the fourth quarter, Bloomberg quoted Chang Chih-ming (張志銘), head of investor relations at Compal, as saying yesterday.
Separately, the company’s board of directors yesterday approved management’s plans to invest in its China operations, earmarking US$100 million to expand to Chengdu, Sichuan Province, and US$40 million for its existing operations in Kunshan, Jiangsu Province, to meet the group’s expansion needs, the statement said.
The company plans to use the money to build up manufacturing capacity for notebook PCs, LCD TVs and other digital consumer products, it said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to