Novatek Microelectronics Corp (聯詠) yesterday said revenue this quarter might grow as much as 1.8 percent from last quarter on the back of rising demand for TV system-on-a-chip (SoC) solutions, as the 2019 novel coronavirus outbreak has had a limited effect on its business.
Display driver ICs last quarter made up about 70 percent of Novatek’s revenue of NT$16.53 billion (US$549.75 million), said the company, which makes driver ICs for flat-panel displays.
“Our shipments have not been affected by the outbreak, despite inconveniences in transportation,” Novatek president and vice chairman Steven Wang (王守仁) told investors during a teleconference.
Photo: Grace Hung, Taipei Times
“Not all companies in Wuhan are in full operation. Some [customers] have only resumed 60 percent” of their capacity, Wang said.
Wuhan, where the outbreak is believed to have originated, is an important manufacturing site for Chinese flat-panel displays.
The outbreak would have a limited effect on the industry, as flat-panel display manufacturers continued operations during the Lunar New Year holiday, Wang said.
The outbreak’s effect on the supply chain is manageable, he said, adding that the company’s wafer suppliers and IC assembly and testing partners are reallocating capacity to Taiwan from China.
The company expects the outbreak to delay demand for smartphones due to transportation restrictions, rather than scaring off buyers, he said.
China accounts for half of Novatek’s revenue. The company has about 400 employees in China, mostly software developers.
All product development projects are continuing, Novatek said.
“If the outbreak can be well-controlled, the new product [smartphone] launches in April should not be affected,” Wang said.
Novatek expects shipments of its advanced touch controllers with display driver integration (TDDI) to grow annually this year, as most 5G smartphones are to be equipped with OLED screens that come with TDDI.
Worldwide TDDI shipments are expected to expand 18 percent annually to 650 million units from between 550 million and 600 million last year, the company said.
Novatek forecast revenue of NT$15.8 billion to NT$16.8 billion for this quarter.
“TV SoC demand looks quite good, as some customers keep placing orders, while driver IC demand appears flat,” Wang said. “Average selling prices are stable” for both products.
Gross margin is expected to be between 31 and 33 percent this quarter, compared with 32.25 percent last quarter.
Net income declined 12.22 percent annually and 11.25 percent quarterly to NT$1.8 billion last quarter.
Net income last year surged 24.05 percent to NT$7.93 billion from NT$6.39 billion in 2018, while earnings per share jumped from NT$10.5 to NT$13.03.
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