Wed, May 09, 2012 - Page 12 News List

MStar’s net profit grew in first quarter

RECORDS:MStar’s Q1 net profit of NT$1.54bn made it the strongest first quarter in the company’s history. It also reported its best monthly sales figure last month

By Lisa Wang  /  Staff reporter

MStar Semiconductor Inc (晨星半導體) yesterday said first-quarter net profit expanded at a 7.5 percent annual rate to NT$1.54 billion (US$52.4 million), helped by growing demand from its TV chip customers, bucking a downtrend in the seasonally slow period.

As the seasonal factor would continue to weigh on the company’s business this quarter, revenues would likely be flat or grow up to 6 percent to between US$300 million and US$318 million, from last quarter’s US$300 million, Wayne Liang (梁公偉), chairman of the world’s top supplier of chips for LCD TVs, told investors.

“The second quarter will be a seasonally slow quarter, with TV chip shipment to being flat, or growing slightly,” Liang said.

TVs chips contributed about 70 percent to the company’s total revenue last quarter, with direct clients from Taiwan, China and South Korea.

Liang’s revenue growth forecast fell short of an 11 percent quarterly growth estimated by Credit Suisse’s Randy Abrams.

Gross margin would contract slightly to between 40 and 42 percent this quarter from 42.5 percent in the January-March period, Liang said, matching Abrams’ forecast.

In the first quarter, net profit increased to NT$1.54 billion, or NT$2.91 a share, compared with NT$1.43 billion, or NT$2.7 a share, in the corresponding period last year, making the first quarter the strongest first quarter in MStar’s history, the company said.

The figure was down 7.5 percent from the fourth quarter’s NT$1.66 billion, or NT$3.13 per share.

This quarter, handset chips would grow at a 20 percent quarterly rate after clients launch mobile phones equipped with its new feature phone chips, which would help customers save on cost, Liang said.

Growth in higher-margin chips for conditional access set-top boxes would offset a decline in chips for unencrypted set-top boxes, he added.

Handset chips made up 15 percent of MStar’s overall revenue last quarter and chips for set-top boxes accounted for more than 5 percent, the chipmaker said.

The third quarter looked like a more exciting period for MStar as shipments of its new chips for smart TVs would grow significantly and customers would start mass production of its first smartphone chips supporting 3G and EDGE technologies by then, according to the company.

MStar has more than 10 clients using its new smartphone chips.

Liang said the company maintained its target of seizing 15 percent share of the world’s feature phone market.

The company also expects its TV chip business to outgrow the 10 percent annual rate for the world’s LCD TVs this year, he added.

MStar also reported its best monthly revenue last month. Revenue was NT$3.11 billion last month, up 9.5 percent from NT$2.83 billion a year earlier, but down 9.2 percent from NT$3.42 billion in March.

Local rival MediaTek Corp’s (聯發科) revenue increased 4.19 percent year-on-year to NT$7.94 billion last month from NT$7.62 billion, but down 3.48 percent from March’s NT$8.23 billion.

MediaTek said in a statement that it expected revenue this quarter to expand as high as 20 percent sequentially to NT$23.5 billion, helped by robust demand for smartphone chips.

MediaTek, the nation’s biggest handset chip designer, said the board yesterday approved a proposal to distribute NT$4 per share in cash dividends based on last year’s net profit of NT$13.63 billion, or NT$12.35 per share.

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