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.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS