Asustek Computer Inc (華碩) yesterday reported that net profit last quarter grew 8 percent sequentially to NT$11.4 billion (US$358.2 million).
Annually, net profit surged 596 percent.
Earnings per share increased to NT$15.4, from NT$14.21 in the previous quarter and NT$2.21 a year earlier.
Photo: Reuters
The company attributed the profit growth to strong sales of its core PC products, an improved product mix and growth in its server business.
While revenue last quarter was flat from the previous quarter, it rose 34 percent year-on-year to NT$189.82 billion, with the system business accounted for 49 percent, followed by the open platform segment at 26 percent, server and infrastructure solutions at 22 percent, and artificial intelligence (AI) of things at 3 percent, the company said.
Asustek expects PC revenue this quarter to decline 10 to 15 percent from last quarter due to seasonality, while revenue from its components segment — mainly motherboards and servers — is also projected to fall by 10 to 15 percent, chief financial officer Nick Wu (吳長榮) told an earnings conference.
Despite surging memory prices, Asustek is confident that it can navigate the challenges on the back of its higher-end product portfolio, strong supply chain management and robust growth in its server business, Wu said, adding that the company’s growth would outperform the industry average this year.
Asustek cochief executive officer S.Y. Hsu (許先越) said that the company had started negotiating with memory suppliers in the third quarter of last year to bring forward chip orders and pile up inventories for several more weeks.
The company’s contracts with memory suppliers usually achieve high fulfillment rates, while its long-term partnerships with suppliers also helped ensure steady supply during period of shortages, Hsu said.
As the current tightness could persist until at least the end of next year, Asustek is negotiating new multi-year agreements, from three to five years, to secure stable supply and maintain competitive pricing, he said.
As memory prices have surged more than 100 percent from last quarter to this quarter, the company would adjust product prices to maintain its profitability once existing low-cost memory inventories are depleted, Hsu said.
The scope of price adjustments depends on regional market competition, supply and demand conditions, and product competitiveness, he added.
Server revenue is expected to increase 50 to 100 percent sequentially this quarter and grow four to fivefold from a year earlier, Hsu said.
Server revenue this year is also projected to grow 50 percent to 100 percent annually after expanding more than 100 percent last year, and is expected to be further supported by the launch of Nvidia Corp’s Vera Rubin AI server platform later this year, Asustek cochief executive officer Samson Hu (胡書賓) said.
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