Peripheral and component supplier Primax Electronics expects its fourth-quarter 2021 revenues to register a double-digit sequential growth, as part of shipments of audio solutions unfulfilled in the third quarter due to shortages of sensor chips, power management ICs and MCUs will be delivered in the fourth quarter, according to the company's chief financial officer YY Hsiao.
At a recent investors conference, Hsiao said Primax's gross margins for the quarter will slip slightly as shipments of smart speakers with lower profit margins will grow significantly to meet demand during the Christmas sales holiday.
Hsiao disclosed that its sales of smart interface solutions for high-end and commercial notebooks, printers and multifunctional business machines will sustain a double-digit sequential growth in the fourth quarter despite a slowdown in work-from-home (WFH) application momentum.
Hsiao also stressed that visual image modules for car-use ADAS systems and police cameras will serve as the largest growth driver for its revenues and profits. The revenue contribution ratio for handset camera modules continues to fall, but the company will not retreat from the handset application market, he continued.
Supply chain sources said Primax's efforts in developing ADAS sensor camera modules are beginning to pay off, given that it has joined the EV supply chains of both Tesla and Amazon-invested Rivian Automotive.
Primax declined to comment on specific clients, but indicated it has many EV-related cooperation projects underway.
In terms of business prospects for 2022, the company has expressed optimism that its sales of smart home devices, docking stations and wireless charging solutions will grow drastically, and shipments of ADAS sensor camera modules to US clients will also surge significantly.
The company will continue to upgrade its audio and AIoT product portfolios, strengthening deployments in offerings with higher gross margins, including fleet management systems, smart locks and smart doorbells.
In terms of manufacturing operations, Primax is set to start commercial production at its new plant in Thailand in November, focusing on product lines that can enjoy preferential tariffs. It has also approved a plan to build new production lines in Taiwan for rolling out devices with high technology content. Nevertheless, China will remain an important production base for the company.
The company's third-quarter 2021 revenues rose 7.42% sequentially to NT$17.669 billion (US$635.57 million), net earnings for the period grew 9.9% sequentially to NT$672 million. Its sales for the first three quarters of the year expanded 5.3% on year reaching NT$51.276 billion.
