Phison Electronics Corp (群聯電子), a supplier of NAND flash memory controllers and modules, yesterday forecast that revenue could grow at an annual pace of 20 percent this year, as a supply crunch and strong demand drive up prices.
The estimate is conservative, the company said, as it is based on it not increasing shipments.
Last year, revenue rose 23 percent to NT$47.56 billion (US$1.68 billion) from NT$38.64 billion.
Photo: CNA
Supply constraints have pushed up the prices for certain flash memorychip controllers, which have surged as much as 50 percent due to price hikes of key components and packaging services, Phison said.
“Supply is very tight. Customers have recently offered to pay higher prices voluntarily to secure shipments,” Phison chairman Pua Khein-seng (潘健成) told a virtual investors’ conference yesterday.
As supply restraints continue, the company has had to ration chips, he said.
Samsung Electronics Co’s closure of its fabs in Austin, Texas, due to an unprecedented cold snap, has added to the already short supply of chip controllers, he added.
Phison has received requests from customers to increase chip supply in the past two to three weeks, indicating that the effects from Samsung’s fab shutdown could be severe, Pua said.
The company is optimistic about this year’s business outlook, he added.
“The first quarter will be a good [season],” he said. “This year as a whole will be a growing year for Phison. We have a good chance to see a significant expansion.”
The company has set an internal target to boost revenue to NT$100 billion, as it is broadening its product portfolios to flash memory controllers and modules used in enterprise solid-state drives, and automotive and industrial devices.
It is also expanding its workforce, with plans to hire 500 new engineers, it said.
Commenting on key component supply constraints faced by most companies, Phison said it should not be a problem for the firm, as it has amassed inventories of passive components that should last for 10 months, and it designs power management chips in-house.
Net profit surged 91.5 percent to NT$8.71 billion last year, compared with NT$4.55 billion the previous year, benefiting from asset-disposal gains. Earnings per share climbed to NT$44.14, up from NT$23.05 in 2019.
Nonoperating profit climbed to NT$5.8 billion last year, from NT$141 million.
The company’s board of directors proposed a cash dividend distribution of NT$23 per common share, representing a payout ratio of 52 percent.
The board also approved a proposal to issue cash dividends twice per year.
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