Asustek Computer Inc (華碩) yesterday forecast that its revenue would drop as much as 24.65 percent this quarter from last year, as the company has changed its sales strategy, cutting shipments of mid to low-end notebook computers to maintain its profitability amid rising cost pressures.
The company forecast that its revenue would drop to between NT$100 billion and NT$110 billion (US$3.14 billion and US$3.46 billion) this quarter, compared with last year’s NT$132.72 billion.
The forecast represents little or no growth in sales from last quarter’s NT$107.5 billion.
Asustek chief financial officer Nick Wu (吳長榮) said the decision was made in response to the increasing average selling prices of key notebook components, such as panels and DRAM, rather than because of market demand.
“The overall market demand for notebooks will remain stable this quarter,” Wu told reporters after an investors’ conference in Taipei.
Wu said Asustek is shifting its marketing resources from the unprofitable mid to low-end notebooks and concentrating on higher-end two-in-one detachable notebooks, its ZenBook series and gaming products.
Under the revised strategy, the company expects revenue from the PC segment to expand by 5 percent from last quarter, Wu said.
Growth momentum of the company’s mobile devices would be stronger than the PC business, driven by the growing demand for the ZenFone 3 series since the products debuted in late August, Wu said.
Revenue from the mobile devices segment would grow by between 10 and 20 percent quarter-on-quarter, Wu said.
The sales contribution from the segment could top 20 percent compared with last quarter’s 17 percent, he said.
Asustek chief executive officer Jerry Shen (沈振來) said the sales momentum of the ZenFone 3 series would extend into next quarter, as demand remains strong in Taiwan, Japan, Indonesia and Brazil.
Shen said Asustek plans to launch its next-generation ZenFone in the second quarter of next year to maintain the momentum of its smartphone business.
Asustek yesterday reported a better-than-expected net income of NT$5.97 billion for last quarter, beating the NT$5.58 billion consensus estimate of analysts.
That was 42 percent higher than last year’s NT$4.21 billion and 45 percent higher than the previous quarter’s NT$4.1 billion, company data showed.
Asustek attributed the growth to stable demand for notebooks and non-operating gains of NT$3.32 billion, which included NT$2.82 billion in dividend income and a foreign-exchange gain of NT$55 million.
However, gross margin fell 0.93 percentage points to 13.9 percent from last year’s 14.83 percent, due to the later launch of its latest ZenFone series compared with the previous year, Wu said.
Operating margin contracted by 0.33 percentage points from last year’s 4.33 percent to 4 percent last quarter, company data showed.
Asustek unveiled the ZenFone 3 series in the third quarter of this year, while the previous series was launched in the second quarter of last year.
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98
COUNTRY-BASED: Setting ceilings on sales of the technology would tighten limits that originally targeted China’s ambitions in artificial intelligence amid security risks US officials have discussed capping sales of advanced artificial intelligence (AI) chips from Nvidia Corp and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations’ AI capabilities. The new approach would set a ceiling on export licenses for some countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials in the administration of US President Joe Biden focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people