Novatek Microelectronics Corp (聯詠), the nation’s biggest supplier of driver ICs for LCD panels, yesterday posted its strongest quarterly net profit in two-and-a-half years, fueled primarily by strong demand for chips used in high-definition LCD panels and single chips for TVs.
Robust growth is expected to continue with revenue this quarter projected to grow to a record high of between NT$14.3 billion (US$476 million) and NT$14.7 billion.
The forecast represents sequential growth of between 9.33 percent and 12.39 percent from the NT$13.08 billion seen last quarter.
The growth rate exceeded the 8 percent sequential increase estimated by Credit Suisse.
Novatak has started strongly, yesterday posting a 14.6 percent increase in revenue for last month reaching NT$4.81 billion, from the NT$4.22 billion seen in June, a separate company statement released yesterday said. On an annual basis, revenue surged 44.63 percent from NT$3.33 billion.
“In the third quarter, demand for silicon-on-chip [SoC] products [mostly for TVs] and driver ICs for mobile phone panels is quite strong,” Novatek president Steve Wang (王守仁) told investors. “Revenue is set to grow further this quarter from last quarter’s high.”
Apart from its new SoC business, driver ICs used in handsets are expected to grow the fastest this quarter, Wang said.
Driver ICs for TV panels would be flat this quarter before a pickup next month, Wang said.
However, the tight supply of wafers used in handsets would force the company to put off shipments of mobile phone panel driver ICs this quarter, he said, adding that the situation would stabilize next quarter.
During the quarter ending June 30, net profit soared by 39.49 percent to NT$1.77 billion, or NT$2.9 per share, compared with NT$1.27 billion, or NT$2.08 a share, in the first quarter.
Gross margin improved to 28.86 percent last quarter, from 28.04 percent in the prior quarter.
This quarter, gross margin is expected to fall to between 27 percent and 28.5 percent, from 28.88 percent last quarter, on expectations that shipments of driver ICs for lower-margin and low-resolution mobile phone panels is set to rise.
Commenting on the uptick in sales of ultra-high-definition TVs, Wang said that the penetration rate would rise to 10 percent this year, which would have a positive impact on driver IC suppliers.
Driver ICs used in TVs were one of the biggest contributions in shipments last quarter, accounting for about 45 percent of Novatek’s total driver IC sales.
Shares of Novatek were unchanged at NT$155.5 yesterday, while the TAIEX inched up 0.03 percent.
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