Memorychip packager and tester Powertech Technology Inc (力成科技) yesterday said that its revenue would slide slightly this quarter, due to sagging demand for chips used in data centers and smartphones.
Unfavorable fallout from the COVID-19 pandemic would cause a “slight setback” to revenue this quarter, compared with last quarter’s NT$19.41 billion (US$656.8 million), Powertech president Hung Chia-yu told investors in a teleconference.
However, revenue this quarter is forecast to surpass the NT$17.71 billion the company made in the third quarter last year, he said.
Photo: Hung Yu-fang, Taipei Times
That would mean the quarter-on-quarter setback would be within 9 percent.
Powertech blamed the forecast for this quarter on weak smartphone sales, as the global economy has not recovered as quickly as expected given the rising number of COVID-19 infections worldwide.
The company said data center operators have also become more cautious about capacity expansion, cutting demand for flash memory used in solid-state drives and system-in-package services.
The company said its equipment loading ratio for its chip packaging service would drop to 75 percent this quarter from 80 percent last quarter, while the utilization ratio for testing services would rise to between 70 and 75 percent this quarter, compared with 70 percent last quarter.
However, Powertech said that it was maintaining its target of posting record-high revenue this year.
“We posted a strong performance for the first half, with revenue hitting a record high, and our customers’ forecasts for the fourth quarter look quite good,” Hung said.
Net profit for last quarter surged 58.2 percent year-on-year to NT$1.75 billion. That represented quarter-on-quarter growth of 6.9 percent from NT$1.63 billion.
The company posted a net profit of NT$3.38 billion for the first six months of the year, up 56.7 percent from NT$2.16 billion in the same period last year. Revenue increased 29.5 percent to NT$38.22 billion.
Gross margin improved to 19.4 percent last quarter from 17.2 percent the previous year, but declined from 19.8 percent in the first quarter.
Demand for replacement 5G smartphones and the installation of more base stations for 5G networks would fuel demand for memory chips in the third quarter, Hung said.
“We believe demand will recover in August or September, as many companies are to launch their new phones, mostly 5G phones, including A [Apple Inc] company and S [Samsung Electronics Co] company, which will give a lift to mobile RAM shipments,” he said.
Powertech is pinning its hopes on increased demand for memory used in graphics chips to mitigate weakness in memory chips for smartphones, while a recovering PC segment, driven by work-from-home and remote education needs, is another bright spot, the company said.
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