After a less-than-stellar 2023 due to inventory adjustments among customers in the second half of the year, the industrial PC (IPC) industry is finally seeing a rebound in demand. During DFI's earnings call on March 11, vice chairman Michael Lee forecasted quarterly growth for 2024, with embedded solutions and AI integration as the company's main AI IPC offerings for various industries, which will help boost average selling prices (ASP) and gross margins.
Although order volumes were still down due to inventory adjustments, Lee noted that the situation has been gradually lifting as demand started to rise. Since the IPC industry generally sees the market reflect growth only three years after substantial changes, DFI has been busy developing new AI products and sending samples to customers during the inventory adjustment phase, to meet inelastic demands for unmanned services, remote management, and other edge AI applications in the next three to five years.
In addition, Lee noted growth in both order volumes and customer base, with demand rising among the company's existing customers. It is also venturing into the unmanned vehicle market. In addition, inelastic demands in cybersecurity, automation, smart medicine, alternative fuels, and railroad transport industries continue to drive growth.
Moreover, quarterly growth in 2024 is expected across the entire corporate group. According to Lee, Aewin Technologies is expected to return to its 2022 growth trajectory, while DFI aims to improve gross margin and return to 30% growth for the year. Meanwhile, Ace Pillar is awaiting the machine tool industry to rebound, as adjustments in the industry have already bottomed out.
In terms of the company's 2023 revenue, the Asia Pacific region accounted for 57%, Europe and the Middle East 23%, and the Americas 20%. Lee attributed the drop in the Asia Pacific share of revenue to a declining market in China, but as the markets in Europe, the Americas, and Japan are all expected to grow, this should offset the slump in the Chinese market.
According to DFI president Alexander Su, the company will be focusing on integrating AI into its three main production lines: industrial motherboards, systems, and touch-controlled computers and displays. The company's motherboards, which support a wide range of applications with both maximized and minimized designs, will also integrate AI edge computing functions, and out-of-band management (OOBM) technologies for remote access to facilitate integration into rugged systems. Meanwhile, human-machine interface (HMI) touch panels will visualize device and machine information to allow real-time tracking.
For 2023, DFI reported NT$9.184 billion (US$292 million) in revenue, a drop of 16% from the previous year. Gross profit dropped 11% from the previous year to NT$2.435 billion (US$77 million), but gross margin improved by 2 percentage points to 27%, while earnings per share (EPS) stood at NT$3.16 (US$0.10).
