Taiwanese semiconductor companies are expected to see revenue growth of 5.6 percent this quarter, supported by continuing strong demand for smartphones and tablets in China and emerging markets, Industry and Technology Intelligence Services (ITIS) said.
Revenue is forecast to expand at a slower pace sequentially this quarter to NT$506.9 billion (US$16.9 billion), compared with growth of 16.8 percent to NT$480 billion last quarter, the market researcher said in a report released on Thursday.
ITIS also raised its revenue forecast for the full year to NT$1.87 trillion, representing an annual growth of 14.4 percent from NT$1.63 trillion. Three months ago, the researcher estimated that revenue would grow 9.3 percent to NT$1.79 trillion.
Chip designers such as MediaTek Inc (聯發科) are expected to lead the advance this quarter, with revenue rising 10 percent sequentially to NT$133.8 billion, benefiting from increasing demand for low-end smartphones in China, ITIS said.
“The rise of low-end smartphones will be a boon to Taiwanese chip designers, as they can supply high-quality chips at competitive prices,” ITIS said in the report.
MediaTek predicted earlier this month that its revenue would rise by 5 to 13 percent sequentially during the quarter ending Sept. 30, backed by growing demand for its chips used in smartphones and tablets. MediaTek primarily supplies handset chips to Chinese companies including Lenovo Group (聯想) and Xiaomi Technology Co (小米).
Contract chipmakers are expected to see revenue growth this quarter slow to 3.9 percent — from 16 percent last quarter — to NT$205 billion this quarter, as customers have turned conservative amid an inventory buildup, ITIS said.
Contract chipmakers account for the biggest portion — at about 40 percent — of overall revenue made by Taiwanese semiconductor firms.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, has said it expects its revenue to expand by 3 to 5 percent this quarter from last quarter’s historical high.
Deutsche Bank analyst Michael Chou (周立中) forecast that TSMC and MediaTek would reach the upper end of their forecast range for this quarter, citing faster-than-expected inventory digestion.
Chou said he expected the stock prices of TSMC and MediaTek to bottom out in the near term as chip designers’ inventory had begun to fall last quarter — one quarter ahead of his expectations.
That would create new order momentum for local semiconductor companies, he said.
He retained TSMC and MediaTek on his top picks.
TSMC rose 0.52 percent to NT$96.50, while MediaTek was unchanged at NT$360 yesterday, Taiwan Stock Exchange data showed.
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
Taipei 101, one of the nation’s leading shopping centers, is planning to reduce its business hours due to decreased demand amid the COVID-19 pandemic. Taipei 101 is to open daily at noon and close at 9pm from April 6, building management said in a statement on Monday. The shopping center has been opening at 11am and closing at 9:30pm from Sunday to Thursday, while closing at 10pm on Friday and Saturday. The restaurants in the food court — on the basement level — would adjust their business hours as necessary, but the supermarket would continue to open at 9am daily, management said. The shopping