Sercomm Corp (中磊) saw its shares rally 1.97 percent yesterday after the broadband equipment supplier gave an upbeat business outlook for next year, expecting robust demand for Internet-connected devices from 5G and Wi-Fi-related devices to fiber-optic products to drive revenue growth.
The Taipei-based company is one of only a few among local electronics firms that expects growth in the post-COVD-19 era, as Internet connection has become indispensable despite the world economy facing greater downside risks due to surging inflation and intensifying geopolitical tensions.
The stock price of Sercomm surged 1.97 percent to the highest level in more than one month at NT$82.7, outperforming the TAIEX, which edged lower 0.04 percent yesterday.
Photo: CNA
“We are looking at healthy and stable growth next year,” company president Ben Lin (林斌) told reporters on Thursday. “Although the overall market demand is in decline, we have developed the right products catering to customers’ demand from certain growing segments.”
The constant technology migration to higher-speed Internet connections through 5G and Wi-Fi-6 technology offers growth opportunities, Sercomm said.
The world’s major economies are injecting massive funds into infrastructure construction including fiber-optic networks to stimulate the economy, which would provide a boon to Sercomm, the company said.
Aside from existing product lines, Sercomm expects to see rapid growth in new demand for television set-top boxes from telecom operators. Sercomm generates about 80 percent of its revenue from supplying broadband devices to telecom operators around the world.
Sercomm has a long order visibility for the next 12 months, but the company is cautiously handling customers’ orders and building chip inventory, as mounting uncertainty about external factors — geopolitical conflict in particular — could cripple demand.
Telecom operators from the EU have axed orders since the second and third quarters, as the economic block has been severely hit by soaring inflation and high energy prices.
However, consistent growth from other areas such as India and Japan have helped offset the losses, Sercomm chairman James Wang (王煒) told reporters on Thursday.
To minimize any impact from geopolitical conflicts, Sercomm has diversified its manufacturing site to the Philippines and is developing a new manufacturing facility in India, the company said.
By next year, the Philippine factory capacity would surpass the company’s factory in China, Wang said.
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