Compal Electronics Co (仁寶電腦) yesterday said its notebook computer shipments might drop by a high single-digit percentage this quarter from last quarter and gross margin might slide from last quarter’s 3.8 percent amid continuing weakness in the global PC market.
However, shipments of smart devices, which include tablets and handsets, might jump 30 percent this quarter, as the company’s tablet clients increase market shares, Compal president Ray Chen (陳瑞聰) told an investors’ conference.
Compal assembles Apple Inc’s iPad Mini series and Amazon.com Inc’s Kindle tablets.
Notebook revenue contributed 73 percent to the company’s total sales last quarter. In the first three quarters, Compal shipped 29.4 million notebooks, down 6.36 percent from 31.4 million units a year ago.
Next year, notebook shipments might remain flat or fall by single-digit percentages from this year, as industry headwinds would extend into next year, Chen said.
As for smartphone sales, Chen said the growth momentum of the segment in the second half of this year is weaker than the company’s previous forecast, after clients decided to streamline their product portfolios.
“Smartphone shipments this quarter might increase mildly from last quarter,” Chen said.
To meet demand from Compal’s Chinese and Indian smartphone clients, Chen said the firm has set up a new manufacturing plant in India.
The plant is to become operational in the first quarter of next year, with an initial production capacity of 200,000 handsets per month, he said.
Compal expects gross margin to contract this quarter on lower revenue scale, but vows to tighten cost control to offset the impact.
"This management guidance suggests clear downside risks to our fourth-quarter forecasts, as we expect revenue to grow 7 percent quarter-on-quarter with the gross margin at 4.0 percent versus. 3.8 percent in the third quarter," Daiwa Capital Markets said in a note yesterday.
For next year, Daiwa said Compal’s revenue might be flat from this year on soft market demand for notebooks, smartphones and tablets.
Compal is working to expand its non-notebook business to offset the softness of that segment, Chen said, adding that he expected the contribution of the non-notebook business to grow from this year’s 27 percent to 35 percent next year.
The company also plans to spend a “significant” amount of money from next year’s capital expenditure of NT$6 billion (US$182.37 million) on its new non-notebook businesses, such as smart clothing, he said.
“The smart-clothing business is to start making contributions to the company’s total revenue from the second half of next year,” Chen said.
Citing new orders and clients, Compal’s server segment should also enjoy a growth in sales next year, he said.
Last quarter, Compal’s net income climbed 12 percent annually and 92 percent quarterly to NT$2.88 billion, or NT$0.67 per share, thanks to growth in notebook shipments and foreign exchange gains of NT$940 million.
Daiwa said Compal’s third-quarter profit beat its forecast of NT$2.5 billion on strong forex gains of NT$940 million, but both of its gross and operating margins of 3.8 percent and 1.2 percent missed its estimates of 3.9 percent and 1.4 percent respectively, due mainly to slower smartphone demand in China.
This story has been updated since it was first published.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San