Telecom equipment supplier Sercomm Corp (中磊) on Wednesday said that it has accumulated a large backlog of orders, thanks to resilient demand for broadband infrastructure deployment worldwide.
The backlog would keep shipments robust through the first half of next year, Sercomm said, adding that only 80 percent of orders can be filled due to component shortages and other supply chain issues.
However, this is an improvement over the worst period last year, when the fulfillment rate was only 60 percent, it added.
Photo: Wang Yi-hung, Taipei Times
Inflation has not dampened demand as more than 80 percent of its revenue comes directly from telecoms, not individual consumers, while major economies, such as the US, China, India and Japan, are spending heavily on infrastructure projects to stimulate their economies, it said.
“We have not gotten a strong sense that customers want to delay or cancel orders,” Sercomm chairman James Wang (王煒) said following the company’s annual shareholders’ meeting in Taipei.
“Surges in oil prices have not affected our customers,” Wang said. “Infrastructure is a segment that has a relatively stronger resistance to recessions.”
While people are not likely to cancel their Internet service because of economic woes, they do postpone speed upgrades, he said.
In addition, remote working and distance learning trends have boosted demand for wider Wi-Fi coverage with faster speeds, he said.
Based on orders received, Sercomm expects revenue this year to surpass US$2 billion.
In the first five months of the year, Sercomm’s revenue rose 38.55 percent year-on-year to NT$22.16 billion (US$750.52 million) from NT$15.99 billion in the same period last year.
Customers have not trimmed orders amid expectations of further COVID-19 lockdowns in China, which could trigger more supply chain and logistical chaos, Wang said.
The global electronics industry is still heavily dependent on Chinese supply chains, he added.
Sercomm aims to double its annual revenue to US$4 billion over the next five to 10 years by increasing shipping capacity and average selling prices.
The company is expanding its product scope beyond home gateways, and looking to supply 4G and 5G base stations for private enterprise networks, as well as street lamps connected to the Internet as part of smart cities.
Sercomm shareholders approved a proposal to distribute a cash dividend of NT$2.4 per share, which represents a payout ratio of about 70 percent, based on last year’s earnings per share of NT$3.44.
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