Networking chip designer Realtek Semiconductor Corp (瑞昱半導體) yesterday said that there has been healthy demand for Ethernet switch and Wi-Fi chips through the first half of this year, as the work-from-home and distance-learning trends are stimulating a broad infrastructure upgrade.
Realtek said that growth momentum is extending from last year as the trends are here to stay amid the COVID-19 pandemic this year.
That is also spurring demand for Internet surveillance devices and outdoor LED displays that incorporate Realtek’s Ethernet chips, the company said.
Photo: Grace Hung, Taipei Times
“We are expecting PC growth momentum to last in the second quarter due to work-from-home and remote-learning trends,” Realtek spokesman Huang Yee-wei (黃依瑋) told investors during a teleconference. “The work-from-home trend is driving an even greater demand than PCs and home routers; it has caused an upgrade in overall infrastructure.”
The company said the semiconductor supply crunch is likely to persist for a while.
“No signs show an easing of the wafer supply-demand imbalance in the first quarter,” Huang said. “Realtek will work together with clients to solve the issue.”
The Hsinchu-based company plans to retain a slim inventory at 60 turnover days in the short term, Huang said.
Realtek said it is confident about order visibility for this year.
Some order backlogs would be digested in the third quarter, it added.
Ethernet switch chips, controller ICs, as well as new Wi-Fi 6 chips are the main growth drivers, Realtek said, adding that the Wi-Fi penetration rate is expected to rise to 30 percent of PCs and 30 percent of home routers worldwide this year, from 20 percent and 15 percent respectively last year.
Demand for the Bluetooth chips used in True Wireless Stereo (TWS) earbuds is also forecast to pick up this year, especially for products with active noise cancelation.
The prices for Bluetooth chips for TWS earbuds with active noise cancelation are two times higher than those without the feature, Huang said.
The company expects its TV chip shipments to be flat this year, as rising panel prices and DRAM chip prices are capping global TV shipments this year.
Net profit last quarter soared 59.7 percent annually to NT$2.63 billion (US$92.65 million) from NT$1.64 billion, while gross margin slid to 43 percent from 43.9 percent a year earlier, Realtek said.
Last year as a whole, net profit increased 29.5 percent to NT$8.79 billion from NT$6.79 billion, and earnings per share climbed to NT$17.24 from NT$13.36.
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