Industrial computer maker Advantech Co (研華) yesterday said revenue this quarter is expected to increase, driven by front-loaded orders from customers amid a shortage of memory chips, as it expressed optimism about full-year performance on the back of strong design wins.
The company said that based on current operations and an assumed exchange rate of NT$31 against the US dollar, it expects this quarter’s revenue to range from US$590 million to US$610 million, compared with NT$17.92 billion (US$565.39 million) in the previous quarter.
Rising prices of DDR DRAM and SSD chips boosted orders for this quarter, as customers placed orders last year amid concerns about component supply tightness, Advantech president of general management Eric Chen (陳清熙) told an earnings conference in Taipei.
Photo: Taipei Times
Orders received in January and last month totaled about US$772 million, with the total secured for this year having exceeded US$1.13 billion, Chen said.
The company also secured US$420 million in design wins this year, up 26 percent year-on-year, he said.
Based on orders received, along with a still-strong demand for industrial computers, the company expects its sales prospects to remain stable, he added.
North America accounted for 31 percent of the company’s revenue last quarter, followed by China at 21 percent and Europe at 16 percent, he said.
The company expects revenue from North America and China to each grow by double-digit percentages year-on-year this quarter, and that from Europe is projected to increase by a high single-digit percentage, Chen said.
Advantech adopts an open pricing strategy for major customers amid the memory price surge, allowing it to pass on purchase price differences if component costs change, but has less flexibility with smaller customers, he said.
The company raised prices by 4 to 8 percent for some products last quarter, Advantech president of embedded president of embedded Internet of Things Miller Chang (張家豪) said.
After memory prices surged, the company began reviewing memory module prices every two weeks and system product prices monthly, he said, adding that memory supply remains stable in the short term.
Advantech reported net profit last quarter rose 12.2 percent quarter-on-quarter and 17.5 percent year-on-year to NT$3.1 billion. Earnings per share increased to NT$3.59 from NT$3.20 in the previous quarter and NT$3.07 a year earlier.
Gross margin rose to 39.8 percent, and operating margin increased to 15.7 percent last quarter.
Gross margin this quarter could reach as high as 40 percent, while operating margin might climb to 18 percent, Chen said.
Last year as a whole, Advantech’s revenue grew 19 percent year-on-year to NT$70.88 billion.
Revenue from the company’s edge artificial intelligence business accounted for 20 percent of total revenue and could rise to 30 percent this year, Chen added.
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