Mon, Feb 18, 2019 - Page 16 News List

CHPT expects lower revenue due to slow 5G rollout

By Lisa Wang  /  Staff reporter

Chunghwa Precision Test Technology Co (CHPT, 中華精測), which provides probe card testing services, expects revenue to plunge 15 percent to 25 percent this quarter from last quarter as customer demand dwindled due to the industry’s slower migration to 5G smartphones and risks from US-China trade tensions.

The company said that soft demand for smartphones would weigh on the semiconductor supply chain, from application processors to power management chips, which took a toll on the company’s revenue outlook for this year.

“We are conservative about the full-year outlook,” company president Scott Huang (黃水可) said on Thursday. “We have seen delays in migration to 5G phones from 4G models, as well as prolonged inventory digestion within the supply chain.”

The company predicted that only 5 million handsets would be upgraded to support 5G technology this year.

The number is should rise to 50 million next year and reach 300 million in 2021, it said.

Global smartphone shipments are expected to drop 3.3 percent annually to 1.4 billion units this year, TrendForce Corp (集邦科技) forecast.

That would present headwinds for CHPT, given that about 65 percent of its revenue of NT$3.28 billion (US$106.32 million) last year came from smartphone application processors.

“There is a high possibility that CHPT will see its revenue dip for the first time since its share debut in 2016,” Huang said.

Huang forecast that revenue would drop by a double-digit percentage this year and gross margin would be about 50 percent to 55 percent.

Yuanta Securities Investment Consulting Co (元大投顧) on Friday projected that the company’s revenue would fall 14 percent from NT$3.56 billion last year to NT$3.07 billion this year on concerns over sagging demand for smartphone application processors.

CHPT provides probe card testing services for semiconductor heavyweights, including Qualcomm Inc, Taiwan Semiconductor Manufacturing Co (台積電), Intel Corp and Advanced Micro Devices Inc.

This year, the company said it aims to expand its new vertical probe card solutions to areas beyond mobile application processors and specific integrated chips.

The company has passed verification for radio frequency chips, power management integrated chips and network chips, and has tapped into the touch display driver IC segment, with products undergoing verification by customers, it said.

The company reported net income of NT$1.65 billion in the fourth quarter of last year, up 45 percent from NT$1.13 billion in the same period of 2017 and marking the best fourth-quarter result in the company’s history, as gross margin rebounded after a reliability issue related to high temperature testing was resolved.

Earnings per share soared to NT$5.02 from NT$3.43.

The final quarter is traditionally a slow season and net income fell 7.82 percent last quarter from NT$1.79 billion in the third quarter of last year.

Gross margin improved to 52.4 percent last quarter, from 50.1 percent in the previous quarter. On an annual basis, it was down from 54.1 percent.

Total net income shrank 2.71 percent to NT$7.16 billion last year from NT$7.36 billion in 2017, primarily due to a higher tax rate, the company said.

Earnings per share dropped from NT$23.51 to NT$21.84.

CHPT’s board of directors on Wednesday approved a proposed cash dividend distribution of NT$10 per common share, boosting its payout ratio to about 46 percent, compared with 43 percent last year.

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