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Mitac stays positive about enterprise demand in 2022

Aaron Lee, Taipei; Joseph Tsai, DIGITIMES 0

Credit: DIGITIMES

Despite rising global inflation, IT product demand from the enterprise segment remains robust, especially for servers and telecom equipment, according to Mitac Holdings president Billy Ho.

However, COVID-19 lockdowns in China have disrupted supply of the machines, resulting in shipment delays. To catch up with orders, Mitac is now working overtime in May and June and expects its operation to rebound in the second half after a decline in the second quarter.

Mitac Computing Technology (MCT), a Mitac subsidiary that mainly handles cloud and edge computing product businesses, currently contributes near 80% of Mitac's revenues, while Mitac Digital Technology (MDT), which primarily focuses on automotive and industrial control products, is seeing 70% of its revenues generated by B2B orders.

With the two major business units, close to 90% of Mitac's revenues are generated from the enterprise business, giving the company confidence in achieving at least a double-digit revenue growth in 2022, Ho said.

Ho pointed out that Mitac's plants in Kunshan, China were affected by the COVID-19 lockdowns and saw April's operation undermined. Since clients' orders remain strong, Mitac will be pushing to catch up in the remaining two months of the second quarter.

However, component shortages will stay a major issue for Mitac's server business and the problem will be more serious in the second quarter than in the first, MCT president Michael Lin said, adding that the company will try to ease the short supply via redesigning its products.

MDT president Steve Chang also noted that demand for industrial tablets and smart poles (streetlights) is robust, but sales of dash cams will slip dramatically because of weakening consumption. However, the company is still positive about sales of commercial vehicles especially their demand for 4G connection. Chang expects the business to have a good chance to achieve double-digit revenue growth in 2022.

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