Wed, Aug 22, 2012 - Page 13 News List

MStar posts pre-tax profit decline

SOME GOOD NEWS:The company expects business to improve slowly this quarter because of seasonal demand and the roll-out of branded smart TVs across the Strait

By Lisa Wang  /  Staff reporter

MStar Semiconductor Inc (晨星半導體), the world’s biggest LCD TV chip supplier, yesterday posted a decline in pre-tax profits for last quarter because of seasonally slack demand for its TV chips.

During the three months ending on June 30, MStar’s pre-tax profits shrank 6 percent to NT$1.58 billion (US$52.7 million), compared with pre-tax profits of NT$1.68 billion in the previous three months, according to a brief financial statement the firm submitted to the Taiwan Stock Exchange.

That was an annual decrease of 3.07 percent from NT$1.63 billion in pre-tax profits in the second quarter of last year.

MStar told investors in May that shipments of LCD TV chips last quarter would be flat, or increase slightly, compared with the first quarter.

Meanwhile, shipments of mobile phone chips, the second-biggest revenue source, would grow 20 percent quarterly, it said in May.

Revenues inched up 0.56 percent to NT$8.96 billion last quarter, from NT$8.91 billion in the first quarter. LCD TV chips made up between 65 percent and 70 percent of the company’s first-quarter revenues and handset chips were the second-biggest revenue source, with a contribution of between 10 percent and 15 percent.

The revenue expansion matched the expectations of MStar chairman Wayne Liang (梁公偉), who said quarterly growth “would be similar to the [0.6-percent growth] rate in the second quarter of last year.”

Gross margin was expected to slide to between 40 percent and 42 percent last quarter, from 42.5 percent in the first quarter, Liang told investors at the time.

This quarter, business would improve gradually, backed by seasonal demand, Liang said recently. Liang told investors that some Chinese branded TV makers were scheduled to roll out new smart TVs, using MStar smart TV chips. Smart TV chips deliver better gross margin than standard LCD TV chips, he said.

MStar, which is scheduled to be fully merged with the nation’s top handset chipmaker MediaTek Inc (聯發科) on Jan. 1, would focus on developing chips for flat-panel TVs and set-top boxes, MediaTek chief financial officer Davide Ku (顧大為) told reporters last week on the sidelines of a media briefing announcing the completion of the first stage of its acquisition of MStar.

As of Monday last week, -MediaTek had bought a 48 percent stake in MStar, paving the way for the handset chipmaker to buy out MStar.

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