Wed, May 07, 2014 - Page 14 News List

Novatek aiming to achieve highest quarterly sales in company history

By Kevin Chen  /  Staff reporter

Novatek Microelectronics Corp (聯詠科技), which supplies chips that control flat-panel displays, aims to achieve the highest sales in its company history this quarter, driven by global overall demand for TV controller chips.

The Hsinchu-based company expects consolidated sales for this quarter to be between NT$12.3 billion and NT$12.8 billion (US$407.6 million and US$424.2 million), according to a statement on its Web site.

That represents a sequential increase of between 16.1 and 20.8 percent from the NT$10.59 billion posted last quarter.

Novatek also forecast its gross margin could be between 27.5 percent and 29.0 percent this quarter, compared with 28.04 percent last quarter, citing a better product mix, while operating margin is expected to rise to between 13.5 percent and 15.5 percent, from 13.11 percent the previous quarter, the statement said.

“The company is seeing strong growth on all its applications this year, including TVs, smartphones, and SoC [system-on-chip], and the improving product mix has also helped its gross margin,” Yuanta Securities Co (元大證券) analyst George Chang (張家麒) said in a client note yesterday.

“Meanwhile, operating expenses should rise at a slower rate this year as previous R&D [research and development] is bearing fruit,” the note said.

Novatek, established in 1997, is a spin-off of United Microelectronics Corp (聯電), the world’s third-biggest contract chipmaker.

On the back of growing demand of 4K2K TVs, high-definition migration in smartphones and market share gain in TV controller chips, the company reported net income of NT$1.27 billion in the first quarter of the year, up 6.38 quarter-on-quarter and 19.37 percent year-on-year, with earnings per share of NT$2.08.

Chang said contribution from the higher-margin SoC business — which saw SoC revenue expand 18 percent quarter-on-quarter and 40 percent annually to account for 20.9 percent of the company’s total revenue last quarter — could increase in the following quarters, as Novatek has a good relationship with South Korean customers in the TV SoC business.

The company’s sales for last month rose 16.1 percent month-on-month and 21.0 percent year-on-year to NT$4.37 billion, the highest-ever monthly level.

For this year, Novatek is expected to see an annual increase of 35 percent in net income, the highest year-on-year growth since 2005, with annual growth for its quarterly revenue and profit likely to continue trending up, Chang forecast.

Novatek shares closed 1.69 percent higher at NT$150 yesterday, ahead of the release of the company’s financial results.

This story has been viewed 1125 times.
TOP top