Simplo Technology Co (新普科技), which mainly supplies battery packs for Apple Inc’s iPhones and MacBooks, yesterday forecast that revenue would improve in the second quarter from the first quarter on the back of increasing orders from major clients.
“The first quarter has been difficult for all companies in the IT [information technology] sector due to industry headwinds,” chairman and CEO Raymond Sung (宋福祥) told an investors’ conference in Taipei.
He forecast that revenue might drop by between 7.6 percent and 11.06 percent to between NT$13.34 billion and NT$13.86 billion (US$411.41 million and US$427.45 million) in the first quarter compared with the same period a year ago due to weaker-than-expected demand and seasonal factors.
Net profit is expected to decline by between 19.48 percent and 12.43 percent annually to between NT$628 million and NT$683 million this quarter, he said.
The guidance for this quarter suggests a decline in sales of as much as 23.46 percent from last quarter’s NT$17.43 billion and a 29.51 percent drop in net profit from NT$891 million last quarter.
Sung did not provide revenue estimates for next quarter, but said it might grow by a double-digit percentage from this quarter, as some of Simplo’s major clients are to start shipping new products next quarter.
He expects revenue this year to increase quarterly, with the second half of the year to be better than the first half, citing an order forecast of Simplo’s IT business clients.
“We aim to increase our revenue this year from last year, although it is still too early to offer a more specific revenue growth goal,” he said.
The company plans to increase the sales contribution from its non-IT business to 10 percent this year to offset potential weakness and uncertainty in the IT sector, Sung said.
“Although the sales contribution from non-IT business is currently less than 10 percent, its gross margin is growing at a steady pace,” he said.
The non-IT business includes battery packs used in electronic vehicles, vacuum cleaners and portable speakers.
The IT sector — smartphones, tablets and notebook computers — accounted for more than 90 percent of the company’s total revenue of NT$64.23 billion last year.
Simplo reported a 7.98 percent annual decline in net income to NT$3.11 billion last year, or earnings per share of NT$10.1.
Gross margin and operating margin declined by 2 percentage points and 1 percentage point to 10 percent and 6 percent respectively last year, company data showed.
The company’s board yesterday approved a NT$2.15 billion dividend distribution plan, which is to include cash dividends of NT$7 per share, translating into a payout ratio of 69.3 percent, greater than the 63.8 percent payout ratio in the same period a year ago.
The planned dividend also suggests a yield of 6.22 percent, based on the company’s closing price of NT$112.5 in Taipei trading yesterday.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective