Microcontroller unit (MCU) supplier Generalplus Technology continues to step up its deployment in non-Chinese markets and diversify its target applications, but is still bracing for gross margin pressure in the second half of this year due to falling prices, according to company president Kevin Chia.
Order visibility for consumer mass-market device applications is less than three months, said Chia. Customers tend to place orders with limited lead times due to market volatility, and the Chinese market continues to struggle, Chia indicated.
The gross margin of Generalplus' MCU product line will continue to be under pressure, so the company will put a growing focus on non-consumer device applications, such as automotive and healthcare, Chia said. The MCU specialist also plans to step up its deployment in non-Chinese markets including Southeast Asia, Europe, the US and Japan are its target markets, Chia continued.
Meanwhile, Generalplus has effectively reduced its internal inventory, according to Chia. At the end of the second quarter of 2023, Generalplus' inventory was 23% lower than it was at the end of 2022 and also lower than it was one year prior.
Generalplus reported consolidated revenue declined 45.7% on year to NT$1.08 billion (US$33.8 million) in the first half of 2023, with operating profits falling 81.3% from a year earlier to NT$90 million. The company generated net profits of NT$98 million, down 77.6% from the same period in 2022.
Chia is less optimistic about the outlook for end-market consumer demand and the recovery of the Chinese market in 2024. The pressure on foundries will intensify in 2024, but they will continue to set prices according to volume, according to Chia. As a fabless chipmaker, Generalplus is working with multiple foundries, said Chia.
Article translated by Jessie Shen
