Display driver IC supplier Novatek Microelectronics Corp (聯詠) yesterday said revenue this quarter would drop more than 10 percent sequentially, which it attributed to weak demand for consumer electronics, but should return to growth next year driven by new product launches.
The company expects its first organic light-emitting diodes (OLED) touch with display driver integration (TDDI) chips to enter volume production in the second quarter of next year, Novatek president Steve Wang (王守仁) told an online investors’ conference.
“We are cooperating with customers, including flat-panel makers and mobile phone vendors, to develop this product. The development is on track,” Wang said.
Photo: Grace Hung, Taipei Times
The company is likely to supply its new OLED TDDI chips to Apple Inc’s new iPhone series next year, local media reports said.
“With several new products scheduled to be introduced next year, Novatek believes that revenue should grow as a result,” Wang said.
Artificial intelligence-enabled smartphones, laptops and PCs are expected to stimulate replacement demand next year, but the outlook for consumer electronics remains uncertain, he said.
Novatek’s reported revenue in the first 10 months of this year shrank 7.28 percent annually to NT$86.05 billion (US$2.67 billion).
The company forecast that revenue this quarter would reach between NT$24 billion and NT$25 billion, compared with NT$27.87 billion last quarter, dragged by a decline in the company’s television chip business, Wang said.
Small and medium display driver ICs were the biggest revenue contributor last quarter, making up 42 percent. Large display driver chips came in next at 37 percent, with the remaining 21 percent coming from television chips.
“The recovery momentum in the overall consumer electronics segment remained weak in the fourth quarter, except for the smartphone segment,” Wang said.
“Demand for monitors and notebook computers also looks weak,” Wang added.
The company expects gross margin to drop to between 37 percent and 40 percent, compared with 39.74 percent last quarter, the lowest in three-and-a-half years, due to a less favorable product mix, rising gold prices and downward price adjustments for certain goods.
As the display driver IC industry enters its slow season this quarter, the company aims to enhance its cost control measures and upgrade product specifications to buoy gross margins, Wang said.
The company reported third-quarter net profit sank 17.4 percent year-on-year and was down 2.4 percent quarter-on-quarter to NT$5.36 billion. Earnings per share dropped to NT$8.64, compared with NT$10.46 a year ago and NT$8.86 the previous quarter.
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