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Chunghwa Precision Test Technology Targets Robust Growth in Probe Card Revenue

Bolstered by AI and high-performance computing chip demand, the company sets sights on double-digit revenue growth and improved margins in 2024
c 6510.TWO Mid and Small Cap 2000 Tech 350
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Chunghwa Precision Test Technology Co. is poised for significant growth in 2024, with ambitions to increase its revenue by a double-digit percentage, driven largely by the escalating demand for artificial intelligence (AI) and high-performance computing chips. Scott Huang, the president of Chunghwa Precision Test Technology, highlighted the burgeoning development within the AI industry as a key catalyst for this growth. The integration of AI features into smartphones, PCs, and notebook computers is particularly stimulating demand for the company’s advanced wafer probing services, thereby enhancing probe card revenue.

The company is strategically expanding its probe card business, having secured new clients involved in developing smartphone chips, SSD controllers, and Wi-Fi 7 chips. This move is expected to boost the probe card revenue contribution by more than 40 percent this year from 33 percent in the last quarter. Huang also projected a gross margin rebound to the normal range of 50 to 55 percent, attributing this optimism to the higher margins associated with the probe card business.

Despite facing challenges such as a global inventory correction cycle and uncertain demand recovery in the electronics sector, Chunghwa Precision Test Technology reported a significant sequential net profit increase of 60.28 percent to NT$17.47 billion in the last quarter, marking a period of strong performance amidst industry-wide adjustments. The company anticipates a gradual pickup in demand during the first half of the year, with expectations for a more pronounced growth momentum in the latter half.

However, concerns remain regarding consumer electronics spending, particularly in markets like China and Europe, which have shown signs of weakness. Huang noted a shift in consumer spending towards travel and luxury goods over electronics, signaling a cautious approach to forecasting a full recovery in electronics demand.

Chunghwa Precision Test Technology’s strategic focus on designing and manufacturing printed circuit boards for semiconductor testers positions it well to capitalize on the increasing demand for AI and high-performance computing technologies. As the company navigates through the current market challenges, its targeted growth initiatives and expansion into new customer segments underscore its commitment to maintaining a leading edge in the semiconductor testing industry.

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