Novatek Microelectronics Corp (聯詠), which designs display drive integrated circuits used in TVs and PCs, expects revenue growth to moderate this quarter due to a weakening demand for electronics in China and the ebbing front-loading demand ahead of the imposition of US tariffs.
Revenue is expected to grow 4 percent sequentially at best to US$866 million this quarter, Novatek president Steve Wang (王守仁) told an online earnings conference yesterday.
In New Taiwan dollar terms, revenue would increase as high as 2 percent sequentially to NT$27.7 billion (US$914.3 million), following a 7.35 percent rise last quarter, he said.
Photo: Grace Hung, Taipei Times
Wang attributed the mild growth to increasing demand for chips used in mobile devices.
“During the second quarter, China is letting up its subsidy program, while customers’ pull-in demand to cope with reciprocal tariff is slowing down,” Wang said. “Similarly, customers’ demand is weakening due to the tariffs’ effect.”
Novatek is closely monitoring how the tariff policy evolves and how it would weigh on consumers’ appetite for electronic devices, he said.
The recent volatility in the NT dollar’s exchange rates is worth noticing, the company said, adding that every 1 percent appreciation of the NT dollar against the US dollar would reduce its net income by about 0.2 percent.
The NT dollar has risen 7.83 percent to NT$30.295 versus the greenback since Jan. 2.
Gross margin this quarter is estimated to be between 37 percent and 40 percent, compared with 39.76 percent last quarter, Novatek said.
The company’s new organic light-emitting diodes (OLED) for touch and display driver integration (TDDI) chips were the focus of investors yesterday amid reports that the new chips are used in Apple Inc’s iPhones.
Novatek said its new OLED TDDI chips had been adopted by its customers for new smartphones launched last month.
Customers are looking at applying such new OLED TDDI chips for more models, Wang said.
However, business visibility for the second half remains unclear, Wang said, citing tariff uncertainty and the volatility of foreign exchange rates.
Novatek does not directly ship any products to the US, but it has about 17 percent of its total revenue exposed to the US market indirectly, Wang said, with products for notebook computers, automotive and TV-related products accounting for a higher percentage.
The company has not seen any abnormal changes in shipments so far as customers behave normally, he added.
Novatek’s net profit in the first quarter expanded 7.96 percent annually and 9.63 percent quarterly to NT$5.26 billion. Earnings per share rose to NT$8.65, from NT$8.04 one year ago and NT$7.89 one quarter earlier.
Gross margin rose to 39.76 percent from 39.51 percent in the prior quarter, but declined from 41.09 percent one year ago.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS