Inventec Corp (英業達) yesterday said its net profit surged in the first quarter because of strong server sales.
The growing popularity of mobile devices such as tablets and smartphones has created robust demand for servers used in large data centers, said the company, the world’s fourth-largest notebook contract maker.
Amid a shrinking notebook computer market, the company has worked to diversify its product portfolio, with strong sales of servers and data storage installations to Hewlett-Packard Co (HP) and Toshiba Corp helping the company generate a net profit of NT$1.61 billion (US$53.79 million) last quarter. That represented growth of 1,238 percent from the NT$120 million it made during the same period last year.
Last quarter, sales of servers and data storage installations accounted for 25 percent of the company’s total sales, Inventec chief financial officer Yu Chin-pao (游進寶) said.
By the end of the year, sales contribution from servers and data storage installations is expected to rise to 30 percent from the current 25 percent, while that from notebooks is forecast to drop to 70 percent from 75 percent, the company said.
“The notebook market is gradually contracting because of rising demand for tablets,” Yu said.
Inventec will produce more consumer, rather than commercial, notebooks this year, Yu said, adding that since many notebook vendors plan to develop more consumer notebook and tablet models, the company would increase research and development efforts to meet its customers’ needs.
Inventec remains optimistic on its outlook as it expects its server shipments to increase by more than 5 percent sequentially in the second half of the year.
Inventec said its factory in Chongqing, China, had begun operating, mainly to produce consumer notebooks.
It plans to manufacture only notebooks in Chongqing and high-margin all-in-one computers and servers at its Shanghai factory.
In a filing to the Taiwan Stock Exchange, the company reported that sales last month reached NT$30.46 billion, down 13.35 percent month-on-month, but up 11.39 percent year-on-year.
Inventec’s shares yesterday closed up 2.07 percent, outperforming the TAIEX, which fell 0.39 percent.