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Giga-Byte Reports Decline in Annual Profits Despite Revenue Growth

Amid a challenging year, Giga-Byte's strong AI server market demand and upcoming CoWoS capacity expansion ignite optimism for recovery
g 2376.TW Mid and Small Cap 2000
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Giga-Byte Technology disclosed its fiscal 2023 results, revealing a 27.5% drop in annual earnings per share (EPS) to 7.46 yuan, marking the second consecutive year of profit decline. Despite the downturn in profits, the company experienced a notable revenue boost of 27.51%, totaling 136.773 billion yuan, driven by robust demand in the AI server segment and anticipated expansions in CoWoS (Chip-on-Wafer-on-Substrate) production capacities.

The tech firm’s financial health saw a contraction in margins, with the gross profit margin receding by 3.37 percentage points to 12.12%, and the net profit margin diminishing by 2.63 percentage points to 3.47%. This resulted in a net profit of 4.742 billion yuan for the year, down by 27.46% from the previous year, underscoring the pressure on profitability amidst escalating market challenges.

Industry analysts are keeping a close eye on the AI server market, particularly on Original Design Manufacturer (ODM) entities like Giga-Byte, which are poised to benefit from the increasing integration of NVIDIA’s GPUs in AI servers. The market anticipates a significant uplift in the latter half of the year as new chipsets like the H200 and B100 are slated for production, potentially catalyzing a surge in manufacturing orders.

Despite the transitional phase impacting OEM order timelines and revenue recognition, the overarching sentiment remains positive. The foundational strength of the AI server demand, coupled with strategic adjustments in the supply chain, sets a promising stage for Giga-Byte. The company’s strategic positioning in the evolving tech landscape, especially in the high-demand AI server sector, fosters confidence in its potential to navigate market fluctuations and capitalize on upcoming industry growth opportunities.

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