Inventec Corp (英業達) chairman Richard Lee (李詩欽) is optimistic that the company’s performance in the second half of this year will be better than the first half, but raised concerns that volatile currency exchanges might erode profitability.
“The shipments for Inventec’s products across the board are expected to grow strongly in the remainder of this year, but the recent sharp appreciation of the New Taiwan dollar against the US dollar adds uncertainty to the profitability,” Lee said yesterday on the sidelines of an Internet of Things forum in Taipei.
The depreciation of the yuan against the greenback also weighed on Inventec’s non-operating performance, Lee said.
Compared with the second quarter of last year, foreign exchange rates affected Inventec’s non-operating items last quarter, but the earnings have not been finalized, he said.
The contract electronics maker is scheduled to release its results for last quarter and offer a detailed outlook on Tuesday next week.
Given the steady and strong demand for commercial notebooks, Lee said he was not too worried about Inventec’s notebook business, which contributed more than 50 percent of the company’s total revenue of NT$95.36 billion (US$3 billion) in the first quarter.
Since Microsoft Corp’s free upgrade program for its Windows 10 operating system ended last month, there is likely to be notebook replacement demand in the consumer market, he said.
However, the firm’s solar power business is under pressure because slowing demand for solar power in China is dampening the average selling prices of solar products over the past few months, he said.
The pressure is expected to extend to this quarter, Lee said, adding that he foresees overall industry demand slowly recovering between next quarter and the first quarter of next year.
Inventec’s solar power business contributed 4.5 percent, or about NT$4.29 billion, of its total revenue in the January-to-March quarter, the company said.
Citing the new government’s pledge to develop Taiwan’s “green” energy industry, Lee said he is upbeat about the outlook for Inventec’s solar power business.
The new government has helped Taiwanese solar power makers find land and Inventec is planning to build a new plant in Tainan’s Shalun District (沙崙) to increase its production capacity for the domestic solar power market.
The company is also mulling the possibility of expanding its solar power business in Southeast Asia, Lee said.
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