Electronic components maker Lite-On Technology Corp (光寶科技) yesterday reported that first-quarter net profit rose 7.3 percent from a year earlier to NT$1.57 billion (US$52.42 million), despite the impact from the COVID-19 pandemic.
While revenue dropped 20.88 percent on an annual basis to NT$32.58 billion due mainly to a production halt in China, its gross margin climbed to a seven-year high of 14.5 percent, thanks to an improved product mix and operating efficiency, the company said.
“The gross margin would be 0.2 percentage points higher if we do not take into account losses incurred by subsidiary Silitech Technology Corp (閎暉),” Lite-On vice chairman and chief operating officer Warren Chen (陳廣中) told investors at an earnings conference in Taipei, adding that the company’s performance was affected by continuous losses from its solid-state drive (SSD) business.
Sale of the SSD unit to Japan’s Kioxia Holdings Corp was delayed by the pandemic, but the deal is expected to close by the end of this quarter, Chen said.
Giving a rosy outlook for business this quarter, Chen said the company is operating at full capacity across its plants in China to satisfy customers’ mass orders.
“Clients are pressing us everyday [because] the market is undersupplied, with sales channels empty,” Chen said.
The company forecast an 18 percent sequential increase in sales this quarter, given more working days than last quarter.
However, order visibility for the second half of the year remains low, as the pandemic continues to affect European and US markets.
“We will have to see how products perform this quarter at end markets,” Chen said.
Facing investors’ concerns over rising prices of passive components, Chen said Lite-On has found a local supplier offering more “reasonable” prices, adding that the company has enough inventory to see production through this quarter.
Lite-On is also aiming to increase its production outside China from 15 percent to more than 20 percent within the next two years.
The company has moved part of its production of motherboards and keyboards to a new manufacturing facility in Vietnam, which is expected to contribute less than 10 percent of total shipments this year, Chen said.
Lite-On last year relocated production of data center components and chargers to a plant in Kaohsiung amid the trade tensions between the US and China.
The company also has production sites in Thailand, Mexico and India.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
RSS