Asustek Computer Inc (華碩) yesterday provided a mild outlook for its business in the upcoming quarters, after revenue fell by a double-digit percentage in the first quarter due to the effects of the COVID-19 pandemic.
“It has become challenging for us to maintain growth in both revenue and profit in the short term... The PC market is no longer on an upward trend,” Asustek chairman Jonney Shih (施崇棠) told shareholders at the company’s annual general meeting in Taipei.
Citing heavy market uncertainty fostered by the pandemic, Shih said that Asustek’s revenue might be affected in the second half of this year.
Photo: CNA
“Everybody is unsure about how everything will turn out ... but market demand will inevitably be dampened by the coronavirus’ effect on the [global] economy,” he said.
The silver lining is a surge in demand due to global lockdowns, which prompted remote working and distance learning, he added.
Asustek supplies notebook computers, smartphones and motherboards under its brand name.
The company yesterday reported that sales last month increased 29.03 percent year-on-year to NT$30.17 billion (US$1.01 billion).
In the first five months of this year, the company’s cumulative revenue contracted by 4.36 percent on an annual basis to NT$123.66 billion.
Analysts forecast that the company’s second-quarter revenue would increase from the previous quarter due to rush orders driven by work-from-home demand.
Seeking to improve operational efficiency, Shih said that he would accelerate Asustek’s digital transformation.
“We can use machine learning and artificial intelligence to help us figure out the most efficient way to produce and assemble PCs,” he said.
The transformation, prompted by the pandemic and US-China trade tensions, is essential for increasing the company’s competitive edge, Shih said.
While Taiwan Semiconductor Manufacturing Co’s (台積電) new investment in the US is a special case, Shih said that final assembly might be set up in proximity to end markets to better serve customers.
The company is also determined to pursue legal action against employees that commit vendor fraud, he told shareholders.
Asustek early last year reported that two of its employees were involved in corruption schemes against local authorities.
Conspiring with vendors, the employees from the procurement department inflated the prices of PC components during five years, which ended up costing the company nearly NT$90 million, the Chinese-language Liberty Times (sister newspaper of the Taipei Times) reported last month.
“We have adopted a very serious attitude toward this issue,” Shih said, citing the company’s strong emphasis on honor.
“Even though it concerns only an extremely small number of people, we have nonetheless decided to take legal action to show Asustek’s determination [in combating such crimes],” Shih said, adding that the company is collaborating with third parties to help lead throughout internal audits.
The two employees are awaiting trial.
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