Global Unichip Corp (GUC, 創意電子), a local chip designer, yesterday posted a 33 percent quarterly decline in net profit for the last quarter as customers cut orders.
However, the company said that its revenue is likely to bottom out this quarter, paving the way for a significant rebound in the second half of the year providing that order volumes for new products rise.
This growth momentum could help the company’s revenue grow by a single-digit percentage this year from last year’s NT$9.01 billion (US$304 million), the firm told an investors’ conference.
“The company is likely to face challenges this quarter and next quarter, but it is just a [short-term] setback and will not affect our long-term business,” GUC chief executive officer Jim Lai (賴俊豪) told investors at the conference.
Lai said that GUC has improved its product yield rate and is ready to develop new products to meet customer demand from the beginning of the third quarter this year.
GUC, which is a subsidiary of the world’s top contract chipmaker, Taiwan Semiconductor Manufacturing Corp (TSMC, 台積電), yesterday said that due to the low yield rate of its System-on-Chip (SoC) turnkey service, some clients canceled orders in December last year, causing it to report a 33 percent quarter-on-quarter drop in net income. Net profit plunged 33 percent to NT$133 million last quarter due to the canceled orders, it said.
However, for the whole of last year, GUC’s net profit increased to a record high of NT$612 million, or NT$4.57 per share, driven by growth in its non-recurring engineering business, which yields a higher gross-profit margins.
“It remains unclear whether the company will be able to make up for orders that it lost last year. GUC’s profitability might improve in the second half of the year at the earliest, as forecast by the company, if its yield rate improves,” Morgan Stanley vice president Charlie Chan (詹家鴻) told the Taipei Times yesterday at the conference.
Lai told investors that GUC would continue developing advanced semiconductor manufacturing technologies, such as using 28-nanometer (nm) or 40-nm processes to offer SoC turnkey services, as well as targeting leading systems companies this year to improve its profitability.