Networking chip designer Realtek Semiconductor Corp (瑞昱半導體) yesterday said it is positive about market demand for the rest of this year, but an industrywide supply chain capacity shortages could cap shipments.
Demand for the company’s chips, which are used in Ethernet routers, Wi-Fi, Bluetooth and switches, has shown strong growth momentum, RealTek said.
Those networking chips are used in PCs, access point routers, broadband, wireless earbuds and other applications, as work-from-home and distance-learning trends due to the COVID-19 pandemic are stimulating a broadband infrastructure upgrade, Huang said.
“PCs have become a necessity. The company has seen robust demand for chips used in notebooks, desktops and computer peripherals in the first quarter,” Realtek spokesman Huang Yee-wei (黃依瑋) told a virtual investors’ conference.
“Capacity supply is the key,” Huang said.
Some customers have opted for lower-spec components to be able to put products on the market, Huang said.
Government agencies have also slowed the purchase of networking devices, such as routers, due to tight supply of key components, he said.
The company expects no quick relief to the industrywide supply constraints until the first half of next year.
“Despite capacity constraints, we continue to see strong customer demand in the second quarter. We are cautious and yet positive about market demand,” Huang said. “The strength will carry on to the first half of next year.”
The only weakness is TV chips, which showed lukewarm growth, as demand has been curbed by a by persistent uptick in TV set prices and a severe supply crunch of key components, including driver ICs and panel displays, Huang said.
Realtek reported net profit of NT$3.06 billion (US$109.44 million) for last quarter, up 87.3 percent from NT$1.63 billion a year earlier and 11.9 percent from NT$2.63 billion in the fourth quarter of last year.
Gross margin improved to 44.8 percent from 42.2 percent a year earlier and 43 percent in the previous quarter.
The company attributed the improvement to a more favorable product portfolio, as it prioritized supply of higher-margin products.
Revenue last month contracted 3 percent from a month earlier to NT$7.81 billion due to the component shortage, but was up 41.2 percent from NT$5.53 billion a year earlier.
Cumulative revenue in the first four months of the year jumped 45.2 percent year-on-year to NT$31.15 billion from NT$21.46 billion.
Taiwan and China are to build more new high-volume semiconductor fabrication plants this year and next year than any other country, together contributing more than half of all new fabs in the world by constructing eight each, SEMI said in a quarterly report yesterday. Global chipmakers are to start building 19 new high-volume fabs by the end of this year and another 10 next year to meet accelerating demand for chips from the communications, computing, healthcare, online services and automotive sectors, SEMI, an association that represents the global semiconductor sector, said in its quarterly report. “Equipment spending for these 29 fabs is
Major PC vendors expect a shortage of key components to last another 12 months until the second quarter of next year, when PC demand wanes after two years of robust expansion, a UBS analyst said yesterday. Concern has risen among investors that PC demand could weaken as the US and European economies reopen from COVID-19 lockdowns and gradually return to in-person business activities. At the annual Taiwan Conference that began on Monday, UBS analysts said they had similar discussions with companies in PC supply chains, and the feedback from major PC vendors indicated that demand remained quite strong on the back of
QUICK CHANGE: After a prolonged drought, the Water Resources Agency said it is preparing for potential floods from intense rainfall this week The Ministry of Economic Affairs yesterday announced that it was easing water restrictions in several regions, thanks to rainfall over the past few days. The water supply alert level has been downgraded from “orange” to “yellow” for Taoyuan and Hsinchu and Miaoli counties, and from “orange” to “green” for Tainan and Chiayi County, the ministry said. Only Taichung remains under “orange” alert, with round-the-clock decreased water pressure, it said. A combination of water management measures and considerable plum rains and tropical showers has seen reservoirs significantly replenished across the nation, Minister of Economic Affairs Wang Mei-hua (王美花) said. Just weeks ago water levels
OPPORTUNITY: The company aims to sell its product soon, as enterovirus vaccines are not available anywhere but China, where firms are only marketing their vaccines locally Medigen Vaccine Biologics Corp’s (高端疫苗) phase 3 clinical trials for an enterovirus 71 (EV71) vaccine completed the multi-regional, multi-central data “unblinding” yesterday, with the results, including safety, immunogenicity and efficacy, meeting its expectations. The company would compile a final analysis report as soon as possible, and apply for the new drug certificate from domestic and foreign drug authorities in the third quarter, Medigen said in a Taiwan Stock Exchange filing yesterday. Its phase 3 trials were conducted in Taiwan and Vietnam with 3,049 participants ranging from two months old to six years old, Medigen said. The company enrolled its first participant for