Novatek Microelectronics Corp (聯詠), which designs driver ICs used in flat panels, expects revenue to drop up to 6 percent sequentially this quarter from an all-time high, as demand for consumer electronics, such as TVs and more affordable Chromebook computers, slackens in the low season.
Revenue is to fall to between NT$36 billion and NT$37 billion (US$1.29 billion and US$1.33 billion) this quarter, compared with NT$38.35 billion in the third quarter, Novatek president Steven Wang (王守仁) told investors in a virtual conference yesterday.
“The industry is entering its slow season in the fourth quarter,” Wang said. “Consumer electronics demand has started to show signs of softening, but we hoped that Singles’ Day, Black Friday and New Year holiday promotions would bolster demand.”
Photo: Grace Hung, Taipei Times
About 29 percent of Novatek’s revenue last quarter came from large display driver ICs (DDI), while small-sized DDIs made up 38 percent. The remaining 33 percent came from TV controllers, power management chips and chips used in surveillance devices.
On the bright side, Novatek said that as employees return to office during the post-COVID-19 period, it is seeing strong demand for notebook computers and monitors from enterprises.
Demand for chips used in vehicles, industrial devices and high-resolution OLED panels for handsets is also on the rise this quarter, Wang said.
Other than demand dynamics, wafer supply constraints continue to weigh on the company’s chip shipments this quarter, Novatek said.
Gross margin this quarter is forecast to range from 48 percent to 51 percent, little changed from 51.94 percent last quarter, as Novatek is unable to fully satisfy customers’ demand for certain chips, Wang said.
Novatek is in talks about raising prices for certain products to mitigate pressure from increasing material costs, he said.
The company also gave an upbeat outlook for next year, expecting annual growths in shipments of large-sized DDIs, driver ICs used in OLED displays and touch DDIs, given increases in wafer capacity and higher penetration of OLED phones.
The Hsinchu-based firm reported record net profit for last quarter of NT$12.27 billion, easily surpassing its share capital of NT$6.09 billion.
That also compares with net profit of NT$3.41 billion last year and NT$9.79 billion a quarter earlier.
Earnings per share jumped to NT$20.17 last quarter from NT$5.6 a year earlier and NT$16.08 in the second quarter.
Separately, Elan Microelectronics Corp (義隆電子), a supplier of touchpad controllers and fingerprint sensors, yesterday said that Microsoft Corp’s launch of Windows 11, would boost computer replacement demand, leading to robust demand for its touchpad controllers and fingerprint sensors next year.
With Microsoft overhauling its operating system, new notebook computers will have to be equipped with more sophisticated and higher-priced touchpad controllers, Elan chairman Yeh I-hau (葉儀皓) said.
The company has secured orders from four of the world’s five major computer brands, he said.
Microsoft is also to bring Android apps to its app store with the release of the Windows11 system, which should help increase penetration of touch screens, Yeh said.
Currently, only 28 percent of notebook computers are equipped with touch screens, he said.
The ratio is forecast to rise to 33 to 35 percent next year, he added.
In the short term, Elan expects seasonal weakness to reduce revenue by as much as 17.5 percent to NT$4.1 billion this quarter, compared with NT$4.98 billion in the prior quarter.
Gross margin is to be between NT$50 percent and 53 percent, versus a record high of 51 percent last quarter.
Elan said that demand is dwindling for its touchpad chips used in Chromebooks.
Net profit last quarter expanded 26.7 percent to NT$1.36 billion from NT$1.08 billion a year earlier and 3 percent from NT$1.32 billion in the second quarter.
Earnings per share rose to NT$4.7 from NT$3.71 a year earlier and NT$4.53 in the previous quarter.
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