Novatek Microelectronics Corp (聯詠), the designer of display driver chips used in TVs, PCs and smartphones, yesterday said revenue this quarter would grow as high as 23 percent sequentially, driven by pull-in orders due to surging key component prices.
Revenue is expected to expand to between NT$27.5 billion and NT$28.5 billion (US$875.5 million and US$907.4 million) this quarter, the company said.
“All three major product lines are to grow meaningfully in the second quarter on a sequential basis,” Novatek president Steve Wang (王守仁) said at an earnings conference.
Photo: Grace Hung, Taipei Times
The strongest growth this quarter would come from the system-on-a-chip (SoC) business, thanks to robust demand for machine vision chips used in edge artificial intelligence (AI) devices, Wang said.
Machine vision chips are specialized chips that combine image sensing and on-chip processing to allow machines to interpret vision data.
In the first quarter, Novatek hiked prices for some machine vision chips to reflect surging DRAM costs, he said, adding that the SoC business accounted for 44 percent of the company’s total revenue in the quarter.
Novataek also saw increasing demand for display driver chips used in large and small panels, Wang said.
The pull-in orders for such chips used in laptop, tablet and monitor panels underscored customers’ concerns about further price hikes in memory chips, he said.
Overall, Novatek expects revenue to regain growth this year, snapping two straight years of declines, thanks to decent contribution from a series of advanced chips to be launched in the second half of this year, Wang said.
That includes new high-end machine vision chips for edge AI devices, new display driver chips integrated with touch chips for OLED foldable smartphones, and display driver chips for high-resolution OLED notebook and monitor panels, he said.
However, geopolitical tensions, such as the conflict in the Middle East, have increased macroeconomic uncertainties that could weigh on end-market demand, Wang said.
Novatek’s net profit last quarter declined 28.44 percent year-on-year to NT$3.77 billion from NT$5.26 billion.
On a quarterly basis, net profit dropped 4.33 percent from NT$3.69 billion.
Earnings per share sank to NT$6.19 from NT$8.65 the year prior, but were up from NT$6.07 a quarter ago.
Gross margin dropped to 39.06 percent from 39.76 percent a year earlier, but improved from 38.19 percent in the previous quarter.
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