Gigabyte Technology Co Ltd (技嘉), a leading supplier of motherboards and graphics cards, is forecast to see lower profitability in the second quarter, due to a decline in shipments and graphics cards prices as the cryptocurrency mining frenzy gradually abates, Capital Investment Management Corp (群益投顧) said last week.
Cryptocurrency mining continues to suffer from tighter security and regulatory measures around the world, with bitcoin’s price having dropped about 55 percent this year, Bloomberg News said, citing the Luxembourg-based Bitstamp exchange.
“The prices of major cryptocurrencies have plunged after peaking in early 2018 ... leading to persistently lower demand for cryptocurrency mining and for Gigabyte graphics card shipments, which decreased somewhat since the beginning of the second quarter,” Capital Investment said in a note on Thursday last week.
Gigabyte’s revenues reached about NT$5 billion (US$163.9 million) in April and again in May, notably lower than March’s NT$8.5 billion, and its second-quarter revenues could be less than in the first quarter, Capital Investment said.
“In our opinion, as the average selling price of graphics cards is expected to edge down, the second-quarter gross margin could underperform quarter-on-quarter,” the investment advisory firm said.
Gigabyte shipped 1.2 million graphics cards in the first quarter and the company said that shipments could see a quarterly decline of 20 percent in the second quarter, the Chinese-language Economic Daily News reported on Wednesday.
The company shipped between 300,000 and 350,000 graphics card units in April and again in May, compared with 450,000 in March, the report said.
Sales from motherboards accounted for 49 percent of Gigabyte’s total sales in the first quarter, followed by graphics cards at 36 percent and servers at 15 percent, the newspaper quoted company spokesman K.J. Sun (孫國仁) as saying at an investors’ conference.
The proportion of sales from graphics cards would drop quarterly in the second quarter, while sales from motherboards and servers would increase, Sun said, without elaborating.
In the second half this year, the company is expecting Nvidia Corp’s planned launch of its new family of Volta graphics processing units (GPUs) to bolster graphics card sales, he said.
However, demand for graphics cards in the next few quarters might not be as robust as the company expects, despite the rapid development of the e-sports industry, Capital Investment said.
It is rumored that Nvidia’s inventory of old GPUs remains high and the launch of the new GPU model might be postponed until September or even the fourth quarter, while Intel Corp might also delay the launch of its new Cannon Lake chip, Capital Investment said.
“Gigabyte’s revenue and earnings in the second half this year could be negatively affected,” it said.
Gigabyte shares on Friday rose 3.22 percent to NT$67.4 in Taipei trading. It reported that its sales for the first five months of the year rose 40.34 percent year-on-year to NT$30.53 billion.
The company saw its shares fall 14.25 percent last month, mirroring broad-based declines among local motherboard and graphics card makers in light of the weaker demand for products used in cryptocurrency mining and the delayed launch of Nvidia’s Volta GPU.
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to
The latest US government action against Huawei Technologies Co (華為) takes direct aim the company’s HiSilicon (海思) chip division — a business that in over the past few years has become central to China’s ambitions in semiconductor technology, but is now to lose access to tools that are central to its success. That could make it the most damaging measure by the US yet against a Chinese company. On Wednesday, US officials told reporters that the Huawei’s chip division functioned as a “tool of strategic influence” for the Chinese Communist Party. Huawei, for its part, denounced the US allegations and called the
RSS