Novatek Microelectronics Corp.. warned of weaker sales ahead as the Taiwanese chip designer grapples with sluggish consumer electronics demand and year-end inventory adjustments from customers.
The company expects fourth-quarter revenue to fall to between NT$24 billion and NT$25 billion (US$740-770 million), representing a 12% decline from the previous quarter, General Manager Wang Shouren told reporters at a press conference Wednesday.
The forecast comes as Novatek reported its lowest gross margin in three years at 39.7% for the third quarter, while October revenue dropped 10.5% year-over-year to NT$8.52 billion. Third-quarter earnings per share declined 2.4% from the previous quarter to NT$8.64.
To counter the slowdown, Novatek plans to launch new products in 2025, including OLED touch and display driver integration chips scheduled for mass production in the second quarter. The company is also expanding into artificial intelligence applications through a partnership with Arm’s Total Design ecosystem.
Despite positioning for AI-driven demand in mobile phones and computers, Wang remained cautious about the immediate outlook, noting that overall demand continues to show weakness despite improved inventory levels for new smartphones.
