Advantech Co (研華) yesterday posted annual growth in net profit of 8.9 percent for last quarter, a lackluster result due to an unfavorable product mix and the strength of the New Taiwan dollar hurting its gross margin.
The world’s biggest industrial computer maker said it expects an unfavorable foreign exchange rate to continue to affect revenue for the whole of the year, and as a result, it expects revenue to expand at a just 5 or 6 percent on an annual basis this year, compared with its forecast of a 10 percent growth rate.
“The foreign exchange rate is an issue faced by almost all industrial computer makers this year plus [weaker] product mix and rising raw material costs. It is very challenging to keep our track record,” Jill Su (蘇智蘋) told a teleconference.
Gross margin slid to 39 percent last quarter, compared with 41.5 percent in the previous year, but up from 38.6 percent in the second quarter.
Advantech attributed the gross margin contraction to robust demand for lower-margin embedded board modules last quarter.
Embedded board modules, which enjoyed the fastest year-over-year growth rate of its product lines, delivered less than 40 percent gross margin, it said.
“We believe the second quarter figure is the trough,” Su said. “The long-term goal is to maintain gross margin at 40 percent.”
Net profit increased to NT$1.59 billion (US$52.7 million) during the quarter ending on Sept. 30, compared with NT$1.47 billion in the same period last year. That translated into earnings per share of NT$2.29 a share, up from NT$2.1.
Demand from Europe and Greater China were quite strong last quarter, while the US market was recovering, the company said.
As for the impact from the exodus in September of 10 senior executives from its contract industrial computer group, Su said that the situation was under control.
Revenue from the business group accounted for 9 percent of Advantech’s total revenue.
Business momentum could weaken in the current quarter after a 20 percent quarterly decline last quarter, due to less vigorous booking, Su said.
Advnatech said it did not rule out the possibility of boosting its holdings in Winmate Inc (融程電訊). It hold 16 percent of the company after investing NT$540 million.
“We believe the companies can create synergy,” Su said.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
‘SEISMIC SHIFT’: The researcher forecast there would be about 1.1 billion mobile shipments this year, down from 1.26 billion the prior year and erasing years of gains The global smartphone market is expected to contract 12.9 percent this year due to the unprecedented memorychip shortage, marking “a crisis like no other,” researcher International Data Corp (IDC) said. The new forecast, a dramatic revision down from earlier estimates, gives the latest accounting of the ongoing memory crunch that is affecting every corner of the electronics industry. The demand for advanced memory to power artificial intelligence (AI) tasks has drained global supply until well into next year and jeopardizes the business model of many smartphone makers. IDC forecast about 1.1 billion mobile shipments this year, down from 1.26 billion the prior
People stand in a Pokemon store in Tokyo on Thursday. One of the world highest-grossing franchises is celebrated its 30th anniversary yesterday.
Zimbabwe’s ban on raw lithium exports is forcing Chinese miners to rethink their strategy, speeding up plans to process the metal locally instead of shipping it to China’s vast rechargeable battery industry. The country is Africa’s largest lithium producer and has one of the world’s largest reserves, according to the US Geological Survey (USGS). Zimbabwe already banned the export of lithium ore in 2022 and last year announced it would halt exports of lithium concentrates from January next year. However, on Wednesday it imposed the ban with immediate effect, leaving unclear what the lithium mining sector would do in the
RSS