Local image sensor supplier PixArt Imaging Inc (原相) yesterday became the latest chip supplier to warn of a dip in revenue this quarter — traditionally a high season — as weak consumer electronics demand spreads to optical mice, heart rate monitors and CCTV cameras.
On top of that, demand for image sensors used in Nintendo Co’s Switch game consoles has continued to slide, as the Japanese maker is struggling with supply of other key components, which could further constrain its production, PixArt said.
PixArt said it would not rule out that revenue would slide further this month and next month from NT$448.4 million (US$14.95 million) last month.
Photo: AFP
Third-quarter revenue might fall 15 percent from NT$1.59 billion last quarter, it said.
Optical mouse sensors were the biggest revenue contributor last quarter, accounting for 61 percent of the company’s total sales, followed by sensors for game consoles at 10 percent, PixArt said.
“We saw a significant decline in consumer electronics demand in June and are seeing customers turn conservative about pulling in goods while the supply chains are undergoing inventory digestion,” PixArt chief financial officer Lo Mei-wei (羅美煒) told an online investors’ conference.
“We now expect revenue in the third quarter to be lower than that of the second quarter,” Lo added.
Soaring inflation, global central banks’ monetary tightening, geopolitical tensions and decelerating economic growth are depressing demand for consumer electronics, PixArt said.
It might take at least two quarters to see supply chain inventory return to a healthy level, Lo said.
The company hopes the year-end shopping season would help speed up inventory digestion and pave the way for a recovery in the first quarter of next year, he said.
PixArt’s days of inventory spiked to 130 days last quarter, compared with its normal 70 to 90 days. The company had built up its chip inventory in the past two years in response to a supply crunch, only to see demand weaken.
Gross margin this quarter might be lower than last quarter’s 55.4 percent, given an unfavorable product mix, Lo said.
Operating margin last quarter plunged to 12.1 percent from 26 percent a year earlier and compared with 4.8 percent in the first quarter.
One bright spot is average selling prices that are likely to be stable this quarter, given high manufacturing costs, PixArt said, citing higher costs for foundry, as well as chip testing and packaging services.
Net profit plunged 48 percent to NT$262.49 million last quarter from NT$511.87 million a year earlier. On a quarterly basis, it more than doubled from NT$127.11 million, PixArt said.
Net profit in the first half tumbled 58 percent to NT$389.6 million from NT$938.33 million a year earlier. Earnings per share slumped to NT$2.75 from NT$6.77.
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