Powertech Technology Inc (力成科技), a memorychip packaging and testing service provider, yesterday revised downward its outlook for the second half of this year, saying that in the worst-case scenario, revenue could dip slightly this quarter on weakening demand for consumer electronics.
The company in April said revenue this year would grow each quarter, and earlier this month reported record-high revenue of NT$23.26 billion (US$777.56 million) for the second quarter.
However, a sudden slump in demand for consumer electronics last month caused by COVID-19 lockdowns in China, soaring inflation and Russia’s war in Ukraine has resulted in a pileup of inventory, Powertech said yesterday.
Photo: Grace Hung, Taipei Times
The company said it still expects full-year revenue to grow annually, based on the hope that robust demand for advanced chips used in the automotive sector, industrial devices and high-performance computing applications would help offset the impact from weak demand for mobile phones and Chromebook chips.
“Even with this revision, we are still on a growth path,” Powertech chairman D.K. Tsai (蔡篤恭) told investors in an online conference. “We tend to be conservative, as we are facing uncertainties that have just arisen.”
“We are positive that revenue and net profit this year will be higher than last year’s. We are not pessimistic at all,” Tsai said.
Demand for DRAM and NAND memory chips for mobile phones, PCs and graphics cards is weakening, while demand for data centers, vehicles and high-performance computing devices can be sustained, Powertech said, adding that demand for advanced logic chips is robust.
Powertech subsidiary Greatek Electronics Inc (超豐電子) expects a significant decline in revenue in the second half of this year, saying that order visibility is hazy.
Greatek Electronics, which focuses on less-advanced logic chip testing and packaging, expects customers to undergo an inventory correction period through the second quarter of next year.
Although customer demand has begun waning, Powertech chief executive officer Boris Hsieh (謝永達) said the company has no plans to cut prices.
The company has been maintaining its inventory at a healthy level, Hsieh said.
Powertech’s net profit expanded 25.7 percent to NT$4.94 billion in the first half, compared with NT$3.93 billion over the same period last year.
Revenue increased 12.9 percent annually to NT$44.09 billion in the first half from NT$39.05 billion a year earlier. About 55 percent of the company’s revenue came from testing and packaging services for DRAM and NAND memory chips.
Gross margin improved to 22.8 percent in the first six months, from 22.3 percent over the same period last year.
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