Fingerprint sensor maker Egis Technology Inc (神盾) yesterday reported that its second-quarter net profit contracted by 35 percent from a year earlier due to sluggish smartphone demand amid fallout from the COVID-19 pandemic and foreign-exchange losses.
While customer demand for fingerprint sensors for all smartphone price ranges has shown signs of rebounding in the second half, an extremely tight supply of wafers has become a new headache for Egis, chief financial officer George Chang (張家麒) told a live-streaming conference.
“We are seeing strong customer orders coming in for the third quarter, but wafer supply has become an issue. Because of a wafer shortage, we cannot 100 percent fulfill customers’ [demand],” he said.
In a worst-case scenario, this could lead to delays in shipments, but orders would be secure, Chang said.
Rising demand would help lift this quarter’s revenue pass last quarter’s NT$1.52 billion (US$51.5 million), Chang said.
Egis’ confidence about revenue growth is also built on customers’ lower inventory, prompting them to rebuild inventory in preparation for the peak demand in the second half of the year, he said.
Egis is also making progress in adding new customers. It has started shipping optical fingerprint sensors to a new client from China. Revenue contribution from this customer would start trickling in this quarter, the firm said, declining to name the customer.
Egis, which counts Samsung Electronics Co among its major customers, said it is broadening its customer base to fend off growing competition from Chinese rivals, primarily Goodix Technology Inc (匯頂科技), which also supplies Samsung.
The company is also gaining more Chinese customers, including Huawei Technologies Co (華為), for which it supplies fingerprint sensors for premium and 5G phones.
During the quarter ending in June, Egis’ net profit fell 35.36 percent to NT$170 million (US$5.75 million), compared with NT$263 million in the second quarter last year. That represented a quarterly contraction of 27.65 percent from NT$235 million.
Earnings per share (EPS) fell to NT$2.5 last quarter from NT$3.5 a year ago and NT$3.4 a quarter earlier. Egis attributed the fall in part to an unrealized foreign-exchange loss of NT$66 million.
Gross margin improved to 45 percent last quarter from 38 percent in the prior year, but edged lower from 46 percent in the first quarter as it shipped more lower-margin capacitive fingerprint sensors for LCD panels, it said.
Net profit in the first half was NT$404.48 million, up 9.31 percent from NT$370.04 million during the same period last year. EPS rose to NT$5.85 from NT$5.37.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
INDUSTRY LEADER: INDUSTRY LEADER: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS