Powertech Technology Inc (力成科技) yesterday reported that net profit last quarter plunged 49 percent year-on-year due to a longer-than-expected inventory correction cycle, but that it expects business to recover later in the year.
Net income fell to NT$1.13 billion (US$36.8 million) from NT$2.2 billion a year earlier and slid 16.5 percent from NT$1.35 billion in the previous quarter, the chip testing and packaging service provider said.
Gross margin declined to 16.1 percent last quarter from 22 percent a year earlier and 17.2 percent in the prior quarter, it added.
Photo: Grace Hung, Taipei Times
“The inventory adjustment lasted longer than we expected,” Powertech chairman Tsai Du-kung (蔡篤恭) told investors.
“We thought the inventory adjustment cycle would end soon, but it was dragged down by a slower-than-expected recovery in the Chinese market and political factors,” he added.
The memorychip industry was hit hard because of its overreliance on the Chinese market, Tsai said.
However, capacity reductions by the world’s major memory chipmakers, including Samsung Electronics Co and SK Hynix Inc, should have a positive effect on the industry, he added.
Demand remains fragile this quarter, although there were sporadic signs of a pickup in the TV, Wi-Fi and networking segments, the company said.
Powertech retained its forecast that revenue would increase at a quarterly pace for the remainder of this year.
The automotive and industrial segments have been growing over the past quarters and would continue to expand this quarter, it said.
To cope with rising demand for those applications, Powertech is expanding capacity in Japan through its subsidiaries Tera Probe Inc and TeraPower Technology Inc.
“The second quarter would be better than the first quarter,” Powertech chief executive officer Boris Hsieh (謝永達) said. “The first quarter would be the trough as we expected.”
The company expects to benefit from the rising popularity of ChatGPT, as demand for servers to support artificial intelligence applications would increase and lead to growth in memory chip demand, Hsieh said.
Powertech said it has proposed a new issue of up to 75.9 million shares to fund potential merger-and-acquisition (M&A) deals abroad, as customers urge the company to diversify its manufacturing sites amid rising tensions between Taiwan and China.
“We believe it would be feasible to purchase an older plant overseas to align with customers’ ‘Taiwan+’ supply chain strategy. It is extremely difficult and not financially viable to build an overseas fab that is capable of offering advanced technologies like those in Taiwan,” Tsai said.
Powertech does not have any M&A targets at the moment, he said.
The company said it plans to raise its cash dividend payout ratio next year as it has abundant cash on hand at NT$18.49 billion and a lower debt ratio of 41 percent, Tsai said.
Powertech has proposed distributing a cash dividend of NT$7 per share for this year, which translates into a payout ratio of about 60 percent based on its earnings per share of NT$11.6 last year.
To cope with sluggish customer demand, Powertech’s capital expenditure would be about 40 percent lower than last year’s NT$16 billion, it said.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Taiwan’s property market is entering a freeze, with mortgage activity across the nation’s six largest cities plummeting in the first quarter, H&B Realty Co (住商不動產) said yesterday, citing mounting pressure on housing demand amid tighter lending rules and regulatory curbs. Mortgage applications in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung totaled 28,078 from January to March, a sharp 36.3 percent decline from 44,082 in the same period last year, the nation’s largest real-estate brokerage by franchise said, citing data from the Joint Credit Information Center (JCIC, 聯徵中心). “The simultaneous decline across all six cities reflects just how drastically the market
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
RSS