Wistron reports strongest first-quarter net profit on robust AI server demand
Wistron Corp (緯創), which supplies graphics processing unit (GPU) server modules to Nvidia Corp, yesterday reported its strongest first-quarter net profit of NT$3.52 billion (US$108.60 million), driven by robust artificial intelligence (AI) server demand.
That was a 5.6 percent expansion from NT$3.34 billion in the fourth quarter last year.
On an annual basis, net profit spiked from NT$174 million in the first quarter of last year, aided by foreign exchange gains of NT$2 billion in the first quarter.
Earnings per share rose to NT$1.24 last quarter, compared with NT$1.18 in the fourth quarter of last year and NT$0.06 in the first quarter of last year.
Gross margin dropped to 7.2 percent last quarter from 9.29 percent in the prior quarter. However, that was still an improvement from 7.01 percent a year earlier.
Wistron yesterday said it booked an asset disposal loss of US$4.6 million last quarter from a deal in which it sold iPhone assembling facilities in India to Tata Electronics Private Ltd for US$130.8 million.
The company said it plans to raise capital expenditure for its plant in Hsinchu County’s Hukou Township (湖口) to US$2.29 billion, up about 43 percent from its original budget of NT$1.6 billion, to cope with new business development and strategic planning needs.
Based on the new budget, the machinery and equipment investment would increase to NT$1.73 billion from NT$1.13 billion, while the investment in building improvements would go up to NT$563 million from NT$472 million, Wistron said.
Wistron makes servers, industrial computers, AI and networking devices at the Hukou plant.
The company in March said that revenue from AI products — GPU-based AI servers, GPU accelerator cards, AI modules and AI systems — would triple this year on an annual basis.
Total capital spending this year would stand at NT$14 billion on account of capacity expansions in Taiwan, Vietnam and Mexico, the company said.
It also plans to inject fresh capital of US$15.5 million into Alpha EMS Corp, its newly acquired, wholly owned US subsidiary, to meet its capital expenditure and operational funding requirements, Wistron said.
Additionally, Alpha EMS would lease a facility from LIPT BIXBY III LLC in California. It would also obtain right-of-use assets for realestate acquisitions within a limit of US$24.85 million for a period of 10 years and four months.