Asustek Computer Inc (華碩) yesterday said it expects its notebook computer shipments to grow mildly this quarter from last quarter, and predicted better smartphone business in the second half of this year.
The PC maker made the comments after releasing its second-quarter financial results, which beat analysts’ forecasts, at a time when the company is working to improve its profit margins against market headwinds.
“This quarter’s notebook shipments will grow from last quarter, mainly due to the lower shipment base in the last quarter, but not because of market demand,” Asustek CEO Jerry Shen (沈振來) told a media briefing after an investors’ conference in Taipei.
Shen said the launch of Microsoft Corp’s Windows 10 is not expected to benefit PC vendors’ shipment performance for the time being, as the US company is offering a free upgrade to current users.
In addition, Intel Corp’s new processor architecture, Skylake, will not be available until next month, which will drag on consumer notebook sales, he said.
“We are carefully controlling our notebook shipments at the moment, as many of the models are running on older processors,” Shen said, adding that he expects Asustek and other PC makers to face a severe shortage of Skylake processors next month.
Noting that last quarter was Asustek’s trough of the year in the PC segment, Shen said the company expects notebook computer shipments this quarter to grow 12 percent to 4.8 million units from 4.3 million units last quarter.
Last quarter’s notebook shipments were lower than Asustek’s original forecast of 4.5 million units, causing the company to lower its annual notebook shipment target last month from a previous estimate of 22.8 million units to 20 million units this year.
However, Asustek’s 5 million smartphone shipments last quarter beat its forecast of 4.8 million units, Shen said, adding that the company expects shipments to increase by 20 percent to 6 million this quarter.
“We remain optimistic about Asustek’s smartphone business,” Shen said, citing growing demand in emerging markets such as India, Indonesia and China.
In addition, Asustek is working with Hon Hai Precision Industry Co (鴻海精密) to manufacture handsets in India and Brazil, Shen said.
“We will start to ship handsets from India at the end of this month,” he said, adding that Hon Hai began to manufacture Asustek’s ZenFone in Brazil at the end of the first quarter.
In the second quarter, Asustek’s net profit declined 3 percent to NT$4.65 billion (US$144.95 million), or NT$6.27 per share, a 27 percent rise from NT$3.68 billion in the first quarter.
Last quarter’s earnings beat HSBC Securities Taiwan Corp’s estimate of NT$4.23 billion by 9.92 percent.
Asustek shares dropped by 1.76 percent to NT$250.5 in Taipei trading yesterday, underperforming the TAIEX, which lost 0.86 percent.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS