Niching Industrial, which distributes IC packaging materials, is expected to see its profits hit a record high in 2022 despite falling demand for display driver ICs, according to market sources.
The company has reported its second-quarter 2022 revenues slipped 9% on year to NT$295 million (US$9.83 million), a flat performance compared to the first quarter. But its gross margin for the quarter advanced 2.5pp sequentially and 5.8pp annually reaching 29.0%, and net earnings jumped 22% on quarter and 116% on year to NT$61.96 million, a record quarterly high and far better than expected.
Its January-June revenues declined 4% on year to NT$590 million, but average gross margin increased 4.2pp on year to 27.7% and net profits ballooned 103% on year to US$113 million, a record high for the six-month period.
Niching's profits for the entire 2022 are expected to grow sharply to a new high, driven by its strategy of maintaining multiple product lines and applications, effectively offsetting declines in packaging materials demand for DDI chips, market sources said.
The company has seen its shipments for HPC and networking applications grow for six consecutive months, with the growth momentum to last throughout 2022, the sources said.
Niching has also scored substantial gains from its two re-invested firms - test socket maker Enplas Niching Technology and packaging substrate supplier STNC - in the first half of the year, thanks to strong demand for 5G and HPC chips. Its re-investment gains for the period already exceeded the corresponding annual total for 2021.
