Taiwanese chip designer Realtek Semiconductor posted a quarterly revenue drop while cautioning that potential US tariffs could disrupt its business model and supply chains.
The company reported second-quarter revenue of NT$31.91 billion ($1.06 billion), down 8.9% from the previous quarter though up 4% year-over-year. Earnings per share fell to NT$7.62 ($0.25) as gross margins compressed to 50.23%, squeezed by Taiwan dollar appreciation against the US currency.
Realtek executives expressed particular concern about the pending US Section 232 investigation into semiconductor imports, with results expected within weeks that could impose significant tariffs on Taiwan-made chips. Deputy General Manager Huang Yi-wei said the company is collaborating with customers and foundry partners to mitigate potential impacts, though costs would inevitably rise.
The firm benefited from pre-tariff inventory building and corporate PC upgrades ahead of Windows 10 support termination, though management expects third-quarter PC demand to stabilize. Industry forecasts show AI-capable PCs driving market growth, with shipments expected to reach over 100 million units in 2025.
Realtek highlighted growth in gaming and AIoT sectors, while facing intensifying competition from Chinese rivals in network infrastructure. The company is developing 4-nanometer and 5-nanometer chips targeting ultra-high-speed interconnect solutions, with design completion scheduled for early 2026.
