Parade 3Q22 sales will decline as customers continue to adjust inventories

Parade Technologies, a Taiwanese IC design house, has recently forecast a large sequential decline in third-quarter 2022 revenue because clients will continue to be keen on managing stocks throughout the year.

According to the company, second-quarter revenues increased 2.84 percent sequentially and 23.65 percent annually to reach US$216 million, which is in line with the anticipated range of US$212-232 million.

According to the company’s estimate, third-quarter sales will be between $150 and 166 million USD, which would represent a sequential decline of 27%.

Its chairman Jack Zhao stated during a recent earnings call conference that a severe reduction in demand for primarily Windows-related laptop and other PC programs is the primary cause of the predicted sequential decline in third-quarter revenues.

He proceeded by saying that it will take at least two quarters for supply chain participants, such as customers, channel distributors, and even panel makers, to process the enormous inventories that still need to be processed.

Zhao added that Parade had forecast its gross margin to be in the healthy range of 44.5 to 8 percent for the third quarter as a result of ongoing portfolio improvements in shipments.

He revealed that the company’s high-speed transmission interface IC shipment ratio has increased dramatically as it continues to target high-end automotive and server applications, allowing it to maintain gross margins despite client inventory adjustments.

In the long run, Zhao is optimistic about notebook applications since each high-end gaming notebook needs 6-7 high-speed transmission chips, compared to 2-3 chips for regular models, and because the business has just launched its USB 4 Retimer for high-end notebooks with no inventory issues.

Zhao stated that Parade will keep working to increase 28nm foundry capacity for its high-end semiconductor solutions, including the soon-to-be-released USB 5 Retimer.


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