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Novatek Reports Modest Revenue Growth and Profit in 2023 Amid Market Challenges

Despite a slight uptick in annual revenue, Novatek navigates through reduced demand with strategic optimism for OLED and AI sectors in 2024
Taiwan
n 3034.TW Mid and Small Cap 2000 Tech 350 Semicon 75
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Novatek revealed its financial results for 2023, showcasing a modest annual revenue growth of 0.43% to NT$110.429 billion. The company experienced a gross profit margin decline of 4.48 percentage points to 41.85%, with operating net profit reaching NT$26.662 billion and earnings per share at 38.32 yuan. The fourth quarter saw a 6.14% quarterly revenue dip to NT$27.154 billion, although it marked a 21.11% increase year-over-year. Despite a slight gross profit margin decrease and a 16.3% quarterly fall in after-tax net profit to NT$5.328 billion, the company reported a 31.79% annual increase in this metric.

Product line performance in Q4 highlighted small-size driver ICs and SOC products each contributing 35% to the revenue, while large-size driver ICs accounted for about 26%. The company attributed the quarterly revenue decline to a slower recovery in consumer electronics demand and year-end inventory adjustments by manufacturers. However, cost reductions and other factors helped exceed gross profit margin expectations.

For the upcoming quarter, Novatek anticipates revenues between NT$24 billion and NT$25 billion, with gross profit margins projected to range from 38.5% to 40.5%, and operating profit margins expected between 19.5% and 21.5%. Vice Chairman Wang Shouren expressed cautious optimism, noting that supply chain inventories are normalizing and highlighting growth prospects in OLED TDDI, TV SOC with new products and customers, and AI application opportunities. He also pointed to potential growth from a new wave of PC and notebook replacements.

January’s revenue figures showed continued growth, with a 0.46% monthly and a 20.71% annual increase to NT$8.72 billion, indicating a positive start to 2024 for Novatek amid ongoing economic and geopolitical uncertainties.

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