Chunghwa Precision Test Technology Co (CHPT, 中華精測), which provides wafer and chip testing services, expects revenue to grow in the second half of this year as it benefits from faster 5G base station deployment by Chinese clients, a company executive said yesterday.
“China released 5G licenses this year earlier than planned, which injects energy into the whole semiconductor industry from this quarter,” CHPT president Scott Huang (黃水可) told an investors’ teleconference.
“For CHPT, 5G base stations represent a good business opportunity,” Huang said. “CHPT has secured clients’ 5G [orders] in the initial stage and the business will continue to expand from that foundation.”
The 5G business started to contribute to the company’s revenue last quarter, albeit on a small scale.
As testing services for 5G chips deliver greater margins compared with other testing services, CHPT’s gross margin this year is to remain at 50 percent, Huang said.
CHPT counts Huawei Technologies Co’s (華為) chip design arm, Hisilicon Technologies Co (海思半導體), and Taiwan Semiconductor Manufacturing Co (台積電) among its major clients.
The company would not be absent from the 5G application processor testing market, but is seeking to diversify away from the segment as part of its risk management efforts, Huang said.
The proportion of revenue generated by application processor testing services dropped to 35 percent of the company’s total revenue in the second quarter, compared with 69.5 percent a year earlier.
CHTP also provides wafer and chip testing services for 5G-related chips, including radio frequency, modem, networking and power management, Huang said, adding that radio frequency chip testing is a new business for the firm.
The company reported that revenue last month rose 0.53 percent year-on-year to a record-high NT$342.15 million (US$10.87 million), but cumulative revenue in the first seven months of this year still fell 17.84 percent annually to NT$1.62 billion.
On Tuesday, the company reported that net profit jumped 25.53 percent to NT$118 million in the second quarter, compared with a four-year low of NT$94 million in the first quarter, thanks to new 5G orders that helped offset declining orders in the smartphone segment.
Earnings per share rose from NT$2.87 to NT$3.59 and gross margin improved from 50.6 percent to 51.9 percent over the period, it said.
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