REALTEK: Wi-Fi chip demand will remain strong in the second half of the year

REALTEK said demand for Wi-Fi and other networking chips will remain strong in the second half of 2022, despite weak demand for consumer electronics applications.

REALTEK noted that customers continue to adjust inventory levels and strategies, and the company expects inventory levels to continue to rise in the third quarter, but remains cautiously optimistic about operations in the second half of the year, which are expected to be better than the first half, according to Taiwanese media outlet Electronic Times.

It is reported that REALTEK's second quarter revenue reached NT$30.5 billion, up 2.5% QoQ and 18% YoY. Gross margin declined to 50.2%, down 2% QoQ and 0.2% YoY, while net profit was NT$4.62 billion, down 12.9% QoQ and up 16.6% YoY.

Regarding the reason for the decline in gross margin in the second quarter, REALTEK attributed it to the increase in upstream foundry costs, which is expected to continue in the short term. However, the company remains confident in its long-term margins.

Previously, REALTEK said that Wi-Fi 6 wireless networking chips gradually replaced Wi-Fi 5 in the PC and router markets last year and are expected to become the mainstream specification this year. In addition to refining the design and development of Wi-Fi 6 and Wi-Fi 6E, the company will also focus on developing Wi-Fi 7 products.