Contract electronics maker Compal Electronics Inc (仁寶) yesterday projected that PC shipments this quarter could fall 15 to 20 percent sequentially due to seasonal factors and memorychip shortages.
The shortage of memory chips could persist into next year, Compal president Anthony Peter Bonadero said at an online earnings conference.
The company will continue to coordinate product priorities with clients to manage rising costs, he said.
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Compal expects PC prices to fully reflect rising costs after it depletes lower-cost memory inventory by the end of this month, he added.
The company remains cautious about the global PC market this year, after major brands, including Lenovo Group Ltd (聯想), HP Inc and Dell Technologies Inc, forecast declines from last year, Bonadero said.
The company is shifting its focus toward higher-spec commercial models and reducing exposure to lower-end consumer and Chromebook segments to address the challenging environment, he said.
Demand for Compal’s commercial PCs is expected to remain stable this year, supported by the extended Windows 10 replacement cycle and rising adoption of artificial intelligence (AI) PCs, he said.
The company expects AI PCs to account for 50 to 60 percent of its total PC shipments this year, rising to about 80 percent next year, he said.
In contrast, Compal’s server business is expected to perform strongly this year, with server revenue this quarter projected to double from the previous quarter due to robust demand, he said.
With order visibility clear through the second half of this year, Bonadero said that servers would account for about 10 percent of total revenue this year.
Server shipments are mainly driven by Nvidia Corp’s HGX B300 and RTX AI platforms, with AI servers expected to account for about 80 percent of total server revenue this year, he said.
Compal is working closely with Advanced Micro Devices Inc on rack-level solutions, while focusing on Nvidia’s next-generation Vera Rubin platform, he said.
Server assembly would initially begin at the so-called “Level 10” integration before gradually moving to Level 11, he added.
Compal’s net profit in the fourth quarter of last year fell 28 percent quarter-on-quarter and decreased 27 percent year-on-year to NT$1.4 billion (US$44.54 million).
Earnings per share slid to NT$0.32 from NT$0.45 in the previous quarter, and were down from NT$0.44 a year earlier.
Gross margin increased to 5.8 percent from 5.7 percent in the previous quarter, and operating margin stayed the same at 1.4 percent from the prior quarter.
The company said non-PC products accounted for 29 percent of its NT$190.9 billion in revenue in the fourth quarter, and should rise to 40 percent this year.
Compal spent NT$8.2 billion on capital expenditure last year and plans to raise spending to about NT$18 billion this year, with NT$6 billion allocated for server-related investments in the US, Taiwan and Vietnam, Bonadero said.
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