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BEIJING, July 26 (TMTPOST)— One of leading analysts in technology industry warned that the weaker performance of the Android mobile market could extend to the year end.
Source: Visual China
The main reason for WIN Semiconductors Corp., the world’s largest gallium arsenide (GaAs) foundry, to offer a conservative outlook for the second half of the year is weak demand for Android phones, Ming-Chi Kuo, an analyst at financial service group TF International Securities, commented the company’s earnings call in a tweet on Tuesday.
The renowned Apple analyst then noted that his latest survey signaled Suppliers of mobile components such as MOSFET, adapter and camera have similar outlook to WIN Semiconductors, and expected inventory corrections to continue until the fourth quarter of the year.
Against the settings, Kuo believes it is not enough to prove that the worst for Android phones is over, even if Android brands had slowed down their order cuts between June and July and the smartphone market in China saw a 9% year-over-year (YoY) increase in June.
Earlier that day, WIN Semiconductors posted significant decline in both the top line and bottom line for the second quarter of 2022. Revenue fell 14% YoY to NT$5.297 billion with a quarter-over-quarter (QoQ) decrease of 5%, while the post-tax net income was NT$544 million, down 41% YoY and 31% QoQ. The quarterly gross margin was 30.2%, decreasing 5.5 percent points from a year earlier and 0.4 points from the previous quarter.
Even in the third quarter, a traditional peak season for mobile phones, WIN Semiconductors expected the revenue to have a mid-twenties QoQ drop due to inventory correction, and the gross margin to be 21% to 23%, suggesting down up to more than 9 points from the second quarter. The Taiwan-based manufacturer pointed out it was still very slow to clear out inventory of Android phones, citing further shocks to demand including the ongoing war in Ukraine, the Covid 19 pandemic disruptions in China and the elevated inflation across the world. Under the circumstance of overall relative low demand in the world’s mobile market, the company gave the conservative outlook for Android phones had too much excess stock though the high-end mobile brands in U.S. had the usual pace to order.
