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.
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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.
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