Wed, Nov 08, 2000 page18

• Sun shines on Sunplus' target

  FAIR WEATHER FORECAST A steady supply of wafers and growing sales from new products will push the chip designer's revenue and profits above its current estimate

  • By Thomas Ker / CONTRIBUTING REPORTER
  • • 
    • 
    • 

  Sunplus Technology Co (凌陽), Taiwan's largest consumer integrated circuit design company, will raise its financial target for the year as new products with high growth rates and a steady supply of wafers have raised revenue and profits beyond previous expectations, a company official said yesterday.

  Last week, Sunplus reported revenue for the first three quarters of NT$4.581 billion, or 85 percent of its target for the year. Its pretax profit of NT$1.521 billion during the same period came to 93 percent of its year 2000 target.

  "If the deviation of the net profit or net sales is more than 20 percent from our prediction, then we have to adjust the forecast," an official at Sunplus said yesterday. "So we will adjust the forecast, but I don't know the firm date," the official said.

  Predicting sales of about NT$1.5 billion in the fourth quarter, the official said that the company should post revenue of about NT$6 billion this year, 11 percent higher than predicted, but within the 20 percent limit. However, net profit will exceed the limit, the official said.

  The fabless designer and manufacturer of LCD controllers, microcontrollers, voice and music synthesizers, and multimedia ICs had predicted at the beginning of the year that a shortage of wafers would affect revenue. However, in consideration of the company's very stable orders, foundries looking to maximize their utilization rates had given priority to Sunplus over smaller chipmakers, the official said. Sunplus subcontracts about 50 percent of its wafer orders to foundry heavy-weight TSMC, and about 10 percent to TSMC's major competitor, United Microelectronics Corp.

  Sunplus also benefited from the high growth rate and profit margin of new products such as its multimedia ICs, as well as the relative stability of revenue against downturns in some market sectors.

  "The consumer electronics market is not like the PC market," the Sunplus official said. "Our market is quite stable as each market segment is quite small," he said. So a downturn in one market segment won't affect revenue in the same way as a downturn in PC sales.

  Analysts weren't surprised by Sunplus' planned readjustment to its forecast, and said that the only factor stopping the company from raising it now is its conservative streak.

  "Maybe it'll wait for a couple of weeks, look at the situation of the stock market, and then decide," said Chou Sheng-csung, an analyst at Jen Hsin Securities. "They should have no problem raising their target," he said. Chou is predicting revenue of NT$5.91 billion and an earnings per share of NT$5.25 for the company, about 18 percent higher than the company's forecast NT$4.45 per share.

  Milton Huang, an upstream electronics analyst at National Securities Corp, said that Sunplus had benefited from the solid performance of the whole IC design industry this year. Further, its original financial target had been relatively conservative. "If the industry around the world is strong, many companies will raise their targets," he said.

  Meanwhile, the growing ratio of sales from Sunplus' multimedia ICs is likely to help maintain fairly solid revenue in the fourth quarter, analysts said.

  "Monthly revenue used to peak each year around August and then fall in the following months," said an analyst at Sampo Securities. In August, Sunplus posted revenue of NT$711 million. The company anticipates revenue for October of about NT$600 million.

  "This year, because of the larger contribution from the multimedia products such as PC cameras and MP3 players, revenue should remain at a high level," the analyst said.
• Most Popular

  • 1

    Palmeiras hopes for club cup win

  • 2

    Magnitude 6.4 earthquake hits Hualien County

  • 3

    Taiwan to see nine extended holidays in 2026

  • 4

    Hegseth outlines Chinese threat

  • 5

    Pegatron ranks last in Greenpeace report