Lite-On Technology Corp (光寶科技), a leading electronic component supplier, yesterday gave a cautious outlook for the second half of this year, despite last quarter posting the best net profit in nine years.
“We would see better results this quarter, as it is the traditional peak season for the electronics industry,” Lite-On vice chairman and chief operating officer Warren Chen (陳廣中) told an investors’ conference in Taipei.
However, Chen said he remains wary about sluggish market demand in the coming months.
“The US-China trade conflict seems to be slowing down, but it remains unresolved,” he said, adding that it has dampened overall demand for mobile phones and cloud-computing equipment.
Chen predicted a decline in automotive electronics shipments next quarter, saying that the Chinese automotive market has declined by double-digit percentages over the past months as the US and European markets also contracted.
“However, we are still hopeful, as we have new applications for our optoelectronics segment next year,” he said, citing time-of-flight cameras and ultraviolet LED applications.
The company is building a plant in Vietnam whose first phase would be completed by next month, Chen said, adding that the plant is expected to start shipments next year.
The first phase of construction at the company’s plant in Kaohsiung has been completed and the plant has begun production, he said, adding that the firm is preparing to relocate the production of data center components and chargers to Taiwan “in case the trade conflict worsens.”
The company reported net profit of NT$2.39 billion (US$76.86 million) for last quarter, or earnings per share of NT$1.03.
Gross margin and operating margin hit records of 15.7 percent and 5.3 percent respectively thanks to operational efficiency, supply chain management and product-mix amelioration, the company said.
Second-quarter revenue rose 8 percent on a quarterly basis, driven by growth in power supply, optoelectronics used in cloud computing, artificial intelligence-applied smart home devices and gaming applications, Lite-On said.
However, revenue declined 2 percent year-on-year — excluding the sale of Lite-On’s mobile phone camera module and mobile mechanical business — which the company blamed on the trade spat, which it said dragged down demand.
The information technology segment contributed 66 percent of overall revenue, followed by the optoelectronics segment with 16 percent and the storage segment with 13 percent, company data showed.
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