Electronic components supplier Lite-On Technology Corp (光寶科技) yesterday said it expects revenue growth to accelerate in the second half of this year, benefiting from growing demand for higher-margin power management units used in cloud-based data centers, automotive electronics and electric vehicle charging piles.
In addition, the company is gearing up to solve order backlogs as constraints on supplies of semiconductors and other key components ease, it said.
Lite-On’s optimism runs counter to the gloom in the market as major cloud service providers, including Amazon.com Inc, are trimming data center orders for the second half of this year as soaring inflation worldwide and economic headwinds dent end-market consumption.
Photo: Screen grab from the Internet
“Customers’ forecasts and market demand both greatly surpass our expectations. Market demand has not shown signs of weakening,” Lite-On president Anson Chiu (邱森彬) told an online investors’ conference.
“The company’s growth is also backed by gains of new orders and new customers. Some new products started entering mass production this year, or are under qualification process,” he said.
Chiu said the growth momentum from the cloud-based server segment is expected to continue for the next two to three years.
As a result, Lite-On expects revenue this quarter to grow on a quarterly and on an annual basis, Chiu said.
The company’s revenue rose 4 percent sequentially and 6 percent year-on-year to NT$42.96 billion (US$1.44 billion) during the quarter ending June 30.
There is a good chance that fourth-quarter revenue would surpass third-quarter levels, Chiu said.
The third quarter is usually the peak for the company’s revenue, he added.
“Overall, we believe growth in the second half would be better than the first half, in line with the company’s growth pattern,” Chiu said.
To satisfy customers’ demand, Lite-On plans to build new capacity in Dallas by renting a factory. It is also expanding capacity at factories in Mexico for power management units used in cloud-based servers and automotive electronics, including advanced driver assistance systems (ADAS) and fast chargers for electric vehicles, Chiu said.
“We are still unable to fully satisfy customers’ demand for automotive electronics,” Chiu said, adding that the capacity deployment in the US aims to meet the US’ long-term “Made in the US” goal.
New capacity from the two locations are to come on line by the end of this year, he said.
Lite-On reported that net profit soared 88 percent quarter-on-quarter to NT$3.96 billion last quarter, compared with NT$2.1 billion in the first quarter. That represented an annual decline of 2 percent from NT$4.03 billion.
Earnings per share rose to NT$1.74 from a quarter ago, flat from a year earlier.
Gross margin rose to a record at 20.4 percent, from 17.1 percent in the first quarter and 19.7 percent in the second quarter last year. It is forecast to climb further this quarter on the back of increasing shipments of higher-margin products and a bigger revenue scale.
Gross margin from power management units for cloud-based servers and automotive electronics ranged between 25 and 30 percent, the company said.
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