[news] Motherboard, graphics card makers see bleak prospects for 1H19
Quote:
Originally Posted by Monica Chen at DigiTimes | Posted: 19 November 2018
Taiwan suppliers of motherboards and graphic cards are expected to see increasingly bleak business prospects through the first half of 2019, due to a spate of adverse factors emerging in the third quarter of 2018, including sustained chill in the crypto mining sector, the supply shortages of Intel CPUs, and lackluster buying sentiment at terminal markets amid the US-China trade war, according to industry sources.
The sources said that the negative factors sharply drove up inventory levels at Asustek Computer, Gigabyte Technology, and other peer makers of motherboards or graphic cards in the third quarter of 2018, causing their revenues for the peak season to fall under expectations.
Revenue prospects for the fourth quarter are further dimmed by lingering sluggish demand from the DIY market, poor growth momentum in the China market and insignificant performance upgrades for Nvidia's new GPU platforms bearing relatively high price tags, the sources continued.
Makers of motherboards and graphic cars are expected to face tough challenges in the first quarter of 2019, when makers with higher graphic card shipment ratios, such as Gigabyte and TUL, may see their profitability halved on quarter due to high comparison bases of a year earlier. This, coupled with Nvidia and Intel likely to raise their chip prices to maintain profitability, may drive makers into a bleak profitability period starting in 2019.
Profitability shrinkage
Among the makers, Asustek saw its net earnings for the third quarter plunge 43% on year to NT$3.34 billion (US$107.95 million), with EPS reaching only NT$4.50, down from NT$7.90 seen a year earlier.
Aided by stable sales of gaming notebooks, Micro-Star International (MSI) saw a slighter on-year drop of 6.6% for net profits to NT$1.50 billion in the third quarter 2018, with EPS also declining slightly to NT$1.79 for the quarter from NT$1.91 of a year earlier. The company's net earnings for the first three quarters shot up 47.2% on year to NT$5.36 billion, with EPS reaching NT$6.35, higher than NT$5.84 for the whole 2017.
Gigabyte's after-tax profits for the third quarter 2018 plummeted to only NT$132 million or EPS of NT$0.23, for the lowest quarterly level recorded since the fourth quarter of 2008.
Gigabyte's annual motherboard shipments for 2018 are estimated to fall under 12 million units from 12.6 million posted in 2017, and its graphics card shipments for 2018 are forecast to drop to the 2016 level of 3.65 million units, down one million units from 2017.
TUL posted an EPS loss of NT$1.34 for the third quarter 2018, compared to a record EPS of NT$10.3 for the first quarter, when crypto mining craze peaked. The firm's EPS for the first three quarter of the year, however, still reached NT$8.25%, mainly bolstered by strong performance in the first quarter.
Source: DigiTimes
