Electronic components supplier Lite-On Technology Corp (光寶科技) yesterday said revenue would grow by at least a double-digit percentage sequentially this quarter due to continued growth in power management units used in cloud-based data centers, automotive electronics and electric chargers.
Lite-On’s forecast came as it manages supply chain disruptions caused by COVID-19 lockdowns in the Chinese electronics manufacturing hubs of Shanghai, Kunshan and Suzhou through production site diversification and more flexible operations.
“The impact on the company’s operation is manageable,” Lite-On president Anson Chiu (邱森彬) told an online investors’ conference in Taipei. “We have prepared sufficient inventory to support our production for one to two weeks.”
Lite-On is also taking alternative routes to ship products to customers’ factories in Chongqing and other Chinese cities unaffected by COVID-19-related transportation restrictions and avoiding Shanghai when importing chips and other raw materials from overseas, Chiu said.
Chiu has an optimistic outlook for this quarter.
“The strongest growth area would be in power management units used in cloud-based servers, which rose about 30 percent quarter-on-quarter last quarter. The growth trend is to carry into the second quarter,” Chiu said. “Automotive electronics has also shown robust demand.”
The strong growth should offset weakness in consumer electronics, such as consumer notebook computers, he said.
However, the bottleneck in semiconductors would continue and constant hikes in chip prices would be major challenges, he said.
The chip shortage has lasted longer than the company expected, Chiu said, adding that it is unlikely to ease in the third quarter as the company predicted early this year.
“It looks like the chip scarcity will carry on into 2023,” Chiu said.
Lite-On also expects semiconductor prices to continue rising in the first half of this year, he said, with prices surging by 10 to 15 percent last quarter.
Semiconductor prices surged between 10 and 15 percent sequentially last quarter on a quarterly basis, he said.
High semiconductor prices reduced Lite-On’s gross margin by 0.7 percentage points to 17.1 percent in the first quarter, compared with 17.8 percent in the corresponding period last year, the company said.
Lite-On is passing the cost increases to customers and expected the impact to be leveled off this quarter, Chiu said.
Net profit plummeted 51 percent to NT$2.1 billion last quarter, compared with NT$4.26 billion (US$147.74 million) a year earlier, mainly due to an asset impatient loss of NT$1 billion from its holding of Vizio Inc, a North-American TV maker. That reversed an asset gain of NT$2.6 billion booked in the first quarter last year.
Lite-On said revenue expanded 9 percent to NT$41.32 billion from a year earlier, marking the best first-quarter performance over the past four years.
The company said it is further shifting production outside China to minimize risks. It is building a new factory in Kaohsiung to produce power management units used in electric vehicles, and is expanding capacity in Thailand and Vietnam as well.
The company also plans to build assembly lines in the US to make power management units used in electric vehicle chargers and automotive electronics for US customers.
●Origin：TaipeiTimes
●Link：https://www.taipeitimes.com/News/biz/archives/2022/04/20/2003776874
Lite-On’s forecast came as it manages supply chain disruptions caused by COVID-19 lockdowns in the Chinese electronics manufacturing hubs of Shanghai, Kunshan and Suzhou through production site diversification and more flexible operations.
“The impact on the company’s operation is manageable,” Lite-On president Anson Chiu (邱森彬) told an online investors’ conference in Taipei. “We have prepared sufficient inventory to support our production for one to two weeks.”
Lite-On is also taking alternative routes to ship products to customers’ factories in Chongqing and other Chinese cities unaffected by COVID-19-related transportation restrictions and avoiding Shanghai when importing chips and other raw materials from overseas, Chiu said.
Chiu has an optimistic outlook for this quarter.
“The strongest growth area would be in power management units used in cloud-based servers, which rose about 30 percent quarter-on-quarter last quarter. The growth trend is to carry into the second quarter,” Chiu said. “Automotive electronics has also shown robust demand.”
The strong growth should offset weakness in consumer electronics, such as consumer notebook computers, he said.
However, the bottleneck in semiconductors would continue and constant hikes in chip prices would be major challenges, he said.
The chip shortage has lasted longer than the company expected, Chiu said, adding that it is unlikely to ease in the third quarter as the company predicted early this year.
“It looks like the chip scarcity will carry on into 2023,” Chiu said.
Lite-On also expects semiconductor prices to continue rising in the first half of this year, he said, with prices surging by 10 to 15 percent last quarter.
Semiconductor prices surged between 10 and 15 percent sequentially last quarter on a quarterly basis, he said.
High semiconductor prices reduced Lite-On’s gross margin by 0.7 percentage points to 17.1 percent in the first quarter, compared with 17.8 percent in the corresponding period last year, the company said.
Lite-On is passing the cost increases to customers and expected the impact to be leveled off this quarter, Chiu said.
Net profit plummeted 51 percent to NT$2.1 billion last quarter, compared with NT$4.26 billion (US$147.74 million) a year earlier, mainly due to an asset impatient loss of NT$1 billion from its holding of Vizio Inc, a North-American TV maker. That reversed an asset gain of NT$2.6 billion booked in the first quarter last year.
Lite-On said revenue expanded 9 percent to NT$41.32 billion from a year earlier, marking the best first-quarter performance over the past four years.
The company said it is further shifting production outside China to minimize risks. It is building a new factory in Kaohsiung to produce power management units used in electric vehicles, and is expanding capacity in Thailand and Vietnam as well.
The company also plans to build assembly lines in the US to make power management units used in electric vehicle chargers and automotive electronics for US customers.
●Origin：TaipeiTimes
●Link：https://www.taipeitimes.com/News/biz/archives/2022/04/20/2003776874
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