Semiconductor component distributors WT Microelectronics Co (文曄) and WPG Holdings Co (大聯大) reported record profits and sales for last year, but the companies could face headwinds this year due to economic uncertainty, a mature smartphone market and inventory adjustments in the supply chain.
WT Microelectronics on Tuesday last week reported that operating profit last year rose 34 percent to NT$5.26 billion (US$170.65 million) and net profit increased 10 percent to NT$2.78 billion, with earnings per share of NT$5.02.
Consolidated revenue grew 44 percent to NT$273.41 billion.
Revenue this quarter would reach NT$65 billion to NT$70 billion, a decline of 18 to 24 percent from last quarter’s NT$85.76 billion on weakness in the communications, consumer electronics, industrial and automotive segments, the company said.
Gross margin is expected to improve from 3.15 percent last quarter to between 3.3 and 3.5 percent this quarter, while operating margin would be 1.4 to 1.6 percent, compared with 1.5 percent last quarter, it said.
“There are some uncertainties in the global economy and supply chain in 2019,” the company said in a statement.
“The semiconductor sector has been experiencing a downturn and WT Micro is no exception, especially with its increasing revenue base from Apple Inc and a relatively large exposure to the China end market,” Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Tuesday last week.
While the current quarter would likely mark “the bottom for this cycle,” it is still too early to tell whether the semiconductor industry will see an L, U or V-shaped recovery, Yuanta said.
Earnings per share this quarter might come in at NT$0.89, down from NT$1.07 last quarter, Yuanta said, adding that it is conservative about the company’s outlook for this year.
In comparison, WPG Holdings’ operating profit grew 6.2 percent to NT$10.57 billion last year and net profit increased 1.7 percent to NT$7.43 billion, with earnings per share of NT$4.21, the company reported on Jan. 29.
Revenue rose 2.37 percent to NT$545.12 billion, it said.
This quarter, WPG forecast that revenue would drop to between NT$117 billion and NT$123 billion, compared with last quarter’s NT$131.82 billion, as the supply chain faces seasonal weakness, inventory adjustments and US-China trade tensions.
Gross margin is projected to fall to between 4.1 and 4.3 percent, from 4.37 percent last quarter, while operating margin could slide to 1.65 to 1.85 percent, compared with 1.92 percent in the previous quarter, WPG said.
As a result, net profit would drop to between NT$1.08 billion and NT$1.35 billion, from last quarter’s NT$1.57 billion, with expected earnings per share of NT$0.64 to NT$0.8, the company said.
“WPG’s 2019 revenue is expected to decline by a single-digit percentage due to macroeconomic uncertainty, a mature handset market and the clients’ conservative ramp-up of production,” Capital Investment Management Corp (群益投顧) said in a report published on Jan. 31.
Earnings would also decline by a single-digit percentage, given higher financial costs due to US interest rate hikes, it said.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
RSS