Mon, Aug 20, 2018 - Page 16 News List

Silergy keeps 20% growth target despite challenges

By Lisa Wang  /  Staff reporter

Silergy Corp (矽力杰), a power management chip designer, on Thursday said that is maintaining its goal of growing revenue by 20 percent annually, pinning its hopes on easing supply constraints on key components such as multilayer ceramic capacitors (MLCCs).

The shortage of MLCCs and other components weakened the company’s revenue growth in the first half of this year, Silergy chairman Issac Chen (陳偉) told investors in an earnings conference.

Revenue grew 14.65 percent year-on-year to NT$4.6 billion (US$149.3 million) in the first six months of this year from NT$4.02 billion for the same period last year. Annual growth lagged behind the company’s goal of achieving a compound annual growth rate of 20 to 30 percent over multiple years.

“It is a challenging year this year,” Chen said. “Short supply of key components and market uncertainties have led to changes in the company’s seasonal patterns.”

Some customers were forced to postpone product launches from the first half of this year until the second half, because of insufficient supply of key components, he said.

Chen said he expects revenue growth momentum to recover in the fourth quarter, fueled by an increase in shipments of solid-state drives (SSD) and high-end consumer electronics.

To reduce supply risks, Silergy has adjusted some of its chip designs to reduce their use of MLCCs by 20 to 30 percent, Chen said, adding that this would also lower costs.

The company is confident of achieving its long-term growth rate of 20 to 30 percent year-on-year, Chen said.

In the first half of the year, Silergy’s net profits edged up 2.54 percent to NT$889 million, compared with NT$867 million in the same period last year. Earnings per share (EPS), however, dropped from NT$10.26 to NT$10.17.

The company’s revenue for last month increased by 12.91 percent year-on-year to NT$831.95 million, with overall revenue for the first seven months rising 14.34 percent to NT$5.43 billion.

Silergy’s revenue for this quarter should grow by up to 13 percent from a year earlier on the back of demand momentum for analog integrated circuits for LED lighting, notebooks, SSDs and charging devices, Capital Investment Management Corp (群益投顧) said in a research note on Friday.

However, as wafer foundries might increase their prices for integrated circuit assembly at 8-inch fabs, given the tight supply-demand conditions, price-cutting pressure from downstream clients, and the rising revenue proportion of low-margin analog integrated circuits for notebooks and LED lighting, Silergy’s gross margin would be under pressure this year and next year, Capital Investment said.

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