Backed by robust demand from the liquid-crystal-display (LCD) display sector in the quarters ahead, Merrill Lynch reiterated its buying rating for Novatek Microelectronics Co (聯詠科技), the nation's largest maker of LCD driver integrated circuits (ICs), in a report released over the weekend.
Shooting up
The US investment bank expected Novatek shares to shoot up to NT$200 (US$5.95) in the next 12 months, which would represent a 45-percent climb from current prices, and raised their forecasts for the chipmaker's earnings per share by 8.1 percent and 6.5 percent respectively to NT$12.4 for this year and NT$15.6 for next.
Shares of Novatek closed up 2.61 percent at NT$137.50 on the Taiwan Stock Exchange on Friday.
"Under aggressive capacity expansion plans of LCD panel makers and limited price pressure of LCD driver ICs in the near-term, we think there is no doubt that Novatek would be in a position to maintain stable growth momentum in the coming quarters," Merrill Lynch's analyst Jonah Cheng (程正樺) said in the report.
10-percent growth
Novatek forecast its fourth-quarter revenue would grow by around 10 percent from the previous quarter and gross margins would stay at between 29.4 to 30.4 percent in the meantime, the report said.
As a subsidiary of the world's second-largest made-to-order semiconductor manufacturer, United Microelectronics Corporation (聯電), Novatek last week had reported a 36-percent increase in third-quarter net income over the previous quarter, to NT$1.71 billion, or NT$3.7 earnings per share, on revenue of NT$6.83 billion, up 11 percent from the previous quarter.
For the first ninth months of the year, the company's net income totaled NT$3.98 billion, or NT$8.64 earnings per share, up 41 percent from a year ago on sales of NT$18.07 billion, up 38 percent compared with the corresponding period last year.
New business
The chipmaker also reaped the rewards of its new handset display driver IC business after it received certification from global No. 1 handset maker Nokia Ojy after getting approval from another first-tier mobile phone maker Motorola Inc earlier this year, Cheng said.
The analyst expected Novatek to start delivery to Nokia in the second half of next year, which would help to bolster the company's growth momentum afterwards, he said.
Bright performance
Betting on possible bright performance in the coming quarters, SinoPac Securities (建華證券) and First Taisec Capital Management Inc (一銀投顧) advised investors to bottom fish for Novatek shares with a short-term target price of between NT$160 and NT$165.
Novatek shares closed up 2.61 percent at NT$137.50 on the Taiwan Stock Exchange last week.
COMPETITION: AMD, Intel and Qualcomm are unveiling new laptop and desktop parts in Las Vegas, arguing their technologies provide the best performance for AI workloads Advanced Micro Devices Inc (AMD), the second-biggest maker of computer processors, said its chips are to be used by Dell Technologies Inc for the first time in PCs sold to businesses. The chipmaker unveiled new processors it says would make AMD-based PCs the best at running artificial intelligence (AI) software. Dell has decided to use the chips in some of its computers aimed at business customers, AMD executives said at CES in Las Vegas on Monday. Dell’s embrace of AMD for corporate PCs — it already uses the chipmaker for consumer devices — is another blow for Intel Corp as the company
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
MediaTek Inc (聯發科) yesterday said it is teaming up with Nvidia Corp to develop a new chip for artificial intelligence (AI) supercomputers that uses architecture licensed from Arm Holdings PLC. The new product is targeting AI researchers, data scientists and students rather than the mass PC market, the company said. The announcement comes as MediaTek makes efforts to add AI capabilities to its Dimensity chips for smartphones and tablets, Genio family for the Internet of Things devices, Pentonic series of smart TVs, Kompanio line of Arm-based Chromebooks, along with the Dimensity auto platform for vehicles. MeidaTek, the world’s largest chip designer for smartphones
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
RSS