Elan Microelectronics Corp (義隆電子) yesterday said its revenue would increase mildly this year, as limited availability of chips constrains its growth momentum.
Elan is the world’s biggest supplier of touchpad controllers primarily used in notebook computers.
The company said it is competing with automakers to secure chips made using less advanced process technologies, such as 40 nanometer and 55 nanometer, from foundry companies such as Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Co (聯電).
Photo: Vanessa Cho, Taipei Times
“The supply of fingerprint chips is particularly short,” Elan chairman Yeh I-hau (葉儀皓) told an online investors’ conference. “To secure more capacity, we started to make changes in [product design] to adapt to different process technologies. We hope to see some breakthrough in the second half of the year.”
Last year, Elan’s revenue jumped 21.4 percent to NT$18.33 billion (US$657.46 million) from NT$15.1 billion in 2020, benefiting from strong demand for notebook computers amid COVID-19-induced work from home and remote schooling trends.
Elan is optimistic about demand this year, as the launch of Microsoft Corp’s Windows 11 operating system in October last year would increase the number of replacement computers purchased, leading to robust demand for its touchpad controllers and fingerprint sensors, it said.
Windows 11 can also run Android apps, which would boost the penetration of touch screens, Yeh said.
Businesses are stepping up notebook computer replacement to adapt to remote working, he said.
Demand for commercial models is growing rapidly, offsetting sagging demand for lower-priced Chromebooks, which is a new growth area for Elan, he said.
“We started shipping touchpad [controllers] to Dell Inc this year,” Yeh said. “Our touchpad controllers used in commercial models have mostly been shipped to Lenovo (聯想) and HP.”
Lenovo is Elan’s biggest customer.
However, surging foundry prices have been eroding gross margin, Yeh said.
It is too early to tell whether a shortage of less advanced chips from 8-inch factories would alleviate significantly, given the scarcity of 8-inch manufacturing equipment, he said.
The issue would likely translate into a decline in gross margin this quarter, which is expected to be between 46.5 percent and 48.5 percent, compared with 49.4 percent last quarter, Elan said.
Revenue this quarter is expected to slide slightly to between NT$4 billion and NT$4.2 billion, from last quarter’s NT$4.16 billion, the company said, attributing the decline to fewer working days and seasonal weakness.
Net profit last quarter expanded about 11 percent to NT$1.31 billion, from NT$1.19 billion in the same period a year earlier. On a quarterly basis, net profit dipped 2.5 percent from NT$1.36 billion.
Last year as a whole, Elan’s net profit climbed to a record NT$5.1 billion, soaring about 57 percent from NT$3.25 billion in 2020.
That translated into earnings per share of NT$17.64, up from NT$11.14 in 2020.
Elan yesterday said its board of directors has approved a plan to distribute cash dividend of NT$13.5 per common share. That represents a payout ratio of 76.53 percent.
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