Asustek Computer Inc (華碩) has delayed its annual launch of a flagship smartphone from April to July at the latest, mainly due to a quarter-long shortage in key components, company executives said yesterday.
Persisting supply constraints on key components and volatility in foreign currency exchange rates would be the two main challenges for Asustek this year, company chief executive officer Jerry Shen (沈振來) told an investors’ conference at the company’s headquarters in Taipei.
The company in November last year told reporters that it hoped to launch its next-generation ZenFone in April this year at the earliest, in an effort to maintain sales momentum, as the ZenFone 3 series product life cycle dissipates toward the end of the first half.
However, shortages in key components have affected Asustek’s plan, Shen said, declining to elaborate on the potential effect on the company’s smartphone business.
The affected components include DRAM, flash memory and flat panels that are used in both notebooks and smartphones, Asustek said.
The component shortages would increase manufacturing costs for Asustek, as component prices rise, industry analysts said.
To cope with rising manufacturing costs, Shen said the company has increased the retail prices for some of its notebook models in selected markets and also plans to hike prices for new models.
With the supply of key components tight, Asustek is to allocate their use to high-margin notebooks such as gaming and two-in-one detachable or convertible products to ensure that the company’s margins remain stable, chief financial officer Nick Wu (吳長榮) said.
Asustek forecast that the proportion of its revenues it gains from its PC business this quarter would drop to 15 percent, from last quarter’s 20 percent, while mobile business revenue would fall by between 10 percent and 15 percent due to seasonal weakness, Wu said.
Looking forward, Shen said Asustek this year hopes to ship close to last year’s 20.61 million PCs.
Revenue from the firm’s PC business is expected to grow mildly year-on-year on the back of increasing sales contributions from higher-priced gaming and two-in-one notebooks, Shen said.
The company last year reported a combined net income of NT$19.2 billion (US$624.08 million), representing NT$25.9 per share, 12 percent higher than 2015’s NT$17.09 billion, or NT$23 per share, company data showed.
Gross margin last year contracted 0.2 percentage points year-on-year to 13.6 percent, while operating margin fell 0.5 percentage points annually to 4.1 percent, the data showed.
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
Sanofi SA’s drug Dupixent succeeded in a late-stage trial for chronic obstructive pulmonary disease (COPD), raising the odds that the blockbuster would be the first biologic medicine cleared to treat the lung disorder. Dupixent, which is already prescribed for asthma and some skin conditions, showed a 30 percent reduction in the rate at which patients’ COPD worsened compared with those who received a placebo during the stage-three Boreas trial, the company said in a statement yesterday. The positive data could herald a new era of cutting-edge treatments for the life-threatening respiratory affliction and provide another major boost in demand for the French
SEMICONDUCTOR EQUIPMENT: The international trade group said the sector would recover from a slump, with spending expected to rise 4.2 percent to US$24.9 billion Taiwan is to retain its position as the top spender on semiconductor front-end equipment and facilities next year, with spending expected to increase 4.2 percent year-on-year to US$24.9 billion, international trade group SEMI said yesterday. The spending forecast matches an expected recovery in global semiconductor equipment and facilities investment next year, it said. International equipment spending is to return to growth next year, SEMI said in a report, forecasting 21 percent growth to US$92 billion. The expansion would manly be driven by robust demand for semiconductors in the automotive and high-performance computing segments, the association said. “This quarter’s SEMI World Fab Forecast update
Taiwan’s semiconductor industry faces multiple challenges, from the need to conduct further research into forward-looking technologies to a shortage of talent, an industry executive said on Wednesday. Advancing forward-looking semiconductor research and nurturing talent require long-term joint efforts by the industry, government and academia, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) corporate research director Marvin Chang (張孟凡) said. Chang outlined the challenges in a speech at a semiconductor forum organized by the National Science and Technology Council (NTSC) in Hsinchu. Noting that manufacturers have been deploying fin field-effect transistor (FinFET) technology for more than a decade to develop advanced microprocessors, Chang said nanosheet is