Realtek Semiconductor Corp (瑞昱半導體) yesterday posted record high net profit for last year after gross margin climbed to surpass 50 percent, supported by strong demand for its chips across the board, from Ethernet switches to Wi-Fi chips, as the work-from-home and online-learning trends stimulated broad infrastructure upgrades.
Net profit soared 91.7 percent to NT$16.85 billion (US$605.29 million) last year, compared with NT$8.79 billion in 2020. That translated to earnings per share of NT$33, up from NT$17.24.
Gross margin jumped to 50.4 percent last year from 42.8 percent in 2020, as Realtek opted to supply higher-margin products amid ongoing semiconductor supply constraints.
Photo: Grace Hung, Taipei Times
Revenue swelled 35.7 percent to NT$105.5 billion last year from NT$77.76 billion in 2020.
Realtek spokesman Huang Yee-wei (黃依瑋) told investors that the company is “seeing positive demand extend into the first half of 2022 at least, from the second half of 2021... Ethernet products are showing strong growth momentum in 2022.”
With people returning to the office, enterprise demand for commercial PCs is continuing to improve, Huang said.
Commercial PCs on average are equipped with higher specification components, such as better audio codecs and smart amplifiers, which are good revenue drivers, he said.
Broader 5G deployment worldwide and infrastructure upgrades are also stimulating demand for networking chips, including Wi-Fi 6, Bluetooth and Ethernet controllers, he added.
“Realtek is not a 5G chip supplier, but the company’s [networking] chips are complementary to 5G network deployment,” Huang said.
The company expects network switch controllers to be another growth driver amid continuing network upgrades worldwide and Realtek is confident about gaining market share, he said.
The global network switch market is expected to expand at a compound rate of 10 percent in the next three to five years, he added.
The company expects rising demand for Wi-Fi 6 chips to also boost growth, Huang said.
This year, about 50 percent to 60 percent of PCs would be equipped with Wi-Fi 6 chips, he said.
Wi-Fi 6 chips deliver a 50 percent price premium compared with the previous generation of Wi-Fi 5 chips, he added.
Realtek also expects strong growth in demand for its new Ethernet chips used in vehicles, as it benefits from the trend of vehicle electrification, Huang said.
As customers are adopting the latest generation of chips, Realtek expects gross margin to hover at about 50 percent for the foreseeable future, he said.
With demand for chips expected to continue to outpace supply, Realtek said that it has secured 8-inch wafers from new foundry partners to add to its supply this year.
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