Networking chip supplier Realtek Semiconductor Corp (瑞昱半導體) yesterday posted a record high net profit for the first quarter of the year, as exuberant demand for chips used in commercial PCs and Internet infrastructure offset slack demand for consumer electronics and chromebooks for students.
The Hsinchu-based chipmaker expects the uptrend to extend into this quarter, despite COVID-19 lockdowns in China that have snarled logistics and halted factories’ operations.
“Overall, demand looks very resilient in the short term. We are cautiously optimistic about the second quarter,” Realtek spokesman Huang Yee-wei (黃依瑋) told an online investors’ conference.
Photo: Hung You-fong, Taipei Times
The company is seeing strong growth momentum for its Ethernet chips and switch controllers this quarter as it benefits from network upgrades, Huang said.
There are no signs indicating a slowdown, he said.
The lockdowns in Shanghai have led to logistical issues and longer delivery times, but the curbs have so far not depressed demand, he added.
A growing number of companies are likely to join Taiwan Semiconductor Manufacturing Co (台積電) and ASE Technology Holding Co (日月光投控), a chip testing and packaging services provider, and reopen their Chinese operations after receiving approval from the Shanghai government, Huang said.
The company is monitoring the situation in Ukraine, China COVID-19 infections and high inflation worldwide, which could weaken demand in the long term, he said.
While scarcity of semiconductors remains a bottleneck, Realtek has added more foundry partners, but it does not expect to see a significant improvement in supply any time soon, he added.
“Based on our current observations, there is little change compared with what we saw three months ago. Chip shortages will not be resolved in the short term,” Huang said. “We are still facing pressure from further price increases [by foundry partners], but the hikes should be less steep than last year.”
Realtek posted a net profit of NT$5.19 billion (US$177.4 million) for the first quarter of the year, an increase of 69.8 percent from NT$3.06 billion in the same period last year.
On a quarterly basis, net profit rose 12.6 percent from NT$4.61 billion.
Earnings per share climbed to NT$10.15 from NT$5.98 a year earlier and NT$9.02 a quarter earlier.
Gross margin rose to 52.2 percent from 44.8 percent in the first quarter last year, but declined from 52.9 percent in the final quarter last year.
Revenue grew 27.5 percent year-on-year, or 8.7 percent quarter-on-quarter, to NT$29.76 billion, an all-time high.
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