Lite-On Technology Corp (光寶科技), a maker of electronic components, expects third-quarter revenue to grow sequentially and annually on the back of continued demand from cloud computing and artificial intelligence (AI) data centers, Lite-On president Anson Chiu (邱森彬) said yesterday.
However, the appreciation of the New Taiwan dollar against the US dollar could reduce third-quarter revenue by as much as 10 percent, with actual growth hinging on whether the firm’s performance offsets the impact, Chiu said.
The sharp appreciation of the local currency reduced last quarter’s revenue by 4 percent, gross margin by 0.2 percentage points and operating margin by 0.5 percentage points, he said.
Photo: CNA
Second-quarter revenue rose 10.99 percent quarterly and 21 percent annually to NT$40.42 billion (US$1.36 billion), driven by a higher share of high-value business segments and high demand for cloud computing.
In the April-to-June quarter, sales in the cloud computing and AI of Things segment rose 37 percent year-on-year to NT$16.73 billion, accounting for 41 percent of total sales, followed by the information technology and consumer electronics segment at 40 percent of total sales, and the optoelectronics segment at 19 percent.
Growth this quarter is expected to be driven by the cloud computing and AI segment, supported by strong demand for battery backup units (BBU) and high-end power shelves used in data centers, while the other two segments would see modest gains, Chiu said.
Net profit in the second quarter fell 8.7 percent quarter-on-quarter to NT$3.16 billion, but rose 1 percent year-on-year. Earnings per share improved to NT$1.39 from NT$1.51 in the previous quarter and NT$1.36 in the second quarter last year.
Operating margin was 9.2 percent, down 0.9 percentage points from the previous quarter and 0.7 points year-on-year, while gross margin fell to 22.1 percent, down 0.5 percentage points quarter-on-quarter and 0.1 percentage points year-on-year.
The sequential declines in margins were due to exchange rate fluctuations, NT$400 million in prepaid 10 percent tariffs for clients on direct US shipments, and increased research and development spending on higher value-added products, Chiu said, adding that an ongoing shift of production from China to Vietnam would also add to near-term expenses.
Lite-On has 40 percent of its production capacity in China, 40 percent in Taiwan and 20 percent in Japan, Chiu said.
The company’s facility in Dallas, Texas, produces power shelves and chargers.
It added two BBU production lines there earlier this year and is building two more with expansion set for completion in the third quarter, he said.
Amid strong data center demand, the company aims to have AI-related business account for more than 20 percent of total revenue this year, up from about 15 percent in the first half of the year.
Lite-On plans to begin shipping its next-generation cooling distribution units as early as next quarter, with the segment expected to contribute 5 percent of revenue next year, Chiu said.
The company is also developing a power supply unit capable of delivering more than 24 kilowatts per module to meet the high power requirements of GB300 servers, he said.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
POWELL SUCCESSOR: US Fed Governor Adriana Kugler’s resignation gives Donald Trump an opening on the board, potentially accelerating his decision on the next chair US President Donald Trump suddenly has a chance to fill an opening at the US Federal Reserve earlier than expected, after Fed Governor Adriana Kugler announced her resignation on Friday. It might also force him to pick the next Fed chair months sooner than he had anticipated. “The ball is now in Trump’s court,” LH Meyer/Monetary Policy Analytics Inc economist Derek Tang said. “Trump is the one who’s been putting pressure on the Fed to do this and that, and Trump says he wants to have his own people on. So now he has the opportunity.” Kugler’s exit unfolds amid unprecedented public pressure
RSS