Local image sensor supplier PixArt Imaging Inc (原相) yesterday became the latest chip supplier to warn of a dip in revenue this quarter — traditionally a high season — as weak consumer electronics demand spreads to optical mice, heart rate monitors and CCTV cameras.

On top of that, demand for image sensors used in Nintendo Co’s Switch game consoles has continued to slide, as the Japanese maker is struggling with supply of other key components, which could further constrain its production, PixArt said.

PixArt said it would not rule out that revenue would slide further this month and next month from NT$448.4 million (US$14.95 million) last month.

Third-quarter revenue might fall 15 percent from NT$1.59 billion last quarter, it said.

Optical mouse sensors were the biggest revenue contributor last quarter, accounting for 61 percent of the company’s total sales, followed by sensors for game consoles at 10 percent, PixArt said.

“We saw a significant decline in consumer electronics demand in June and are seeing customers turn conservative about pulling in goods while the supply chains are undergoing inventory digestion,” PixArt chief financial officer Lo Mei-wei (羅美煒) told an online investors’ conference.

“We now expect revenue in the third quarter to be lower than that of the second quarter,” Lo added.

Soaring inflation, global central banks’ monetary tightening, geopolitical tensions and decelerating economic growth are depressing demand for consumer electronics, PixArt said.

It might take at least two quarters to see supply chain inventory return to a healthy level, Lo said.

The company hopes the year-end shopping season would help speed up inventory digestion and pave the way for a recovery in the first quarter of next year, he said.

PixArt’s days of inventory spiked to 130 days last quarter, compared with its normal 70 to 90 days. The company had built up its chip inventory in the past two years in response to a supply crunch, only to see demand weaken.

Gross margin this quarter might be lower than last quarter’s 55.4 percent, given an unfavorable product mix, Lo said.

Operating margin last quarter plunged to 12.1 percent from 26 percent a year earlier and compared with 4.8 percent in the first quarter.

One bright spot is average selling prices that are likely to be stable this quarter, given high manufacturing costs, PixArt said, citing higher costs for foundry, as well as chip testing and packaging services.

Net profit plunged 48 percent to NT$262.49 million last quarter from NT$511.87 million a year earlier. On a quarterly basis, it more than doubled from NT$127.11 million, PixArt said.

Net profit in the first half tumbled 58 percent to NT$389.6 million from NT$938.33 million a year earlier. Earnings per share slumped to NT$2.75 from NT$6.77.

Malaysia is scrambling to protect its assets as the descendants of the last sultan of the remote Philippine region of Sulu look to enforce a US$15 billion arbitration award in a dispute over a colonial-era land deal. In 1878, two European colonists signed a deal with the sultan for the use of his territory in present-day Malaysia — an agreement that independent Malaysia honored until 2013, paying the monarch’s descendants about US$1,000 per year. Now, 144 years later after the original deal, Malaysia is on the hook for the second-largest arbitration award on record for stopping the payments after a bloody incursion

RECOVERED CONFIDENCE: As market rationality returns, Taiwanese stocks that have lagged behind their US peers might soon catch up, Allianz researchers said Local shares last week defied heavy pressure from China’s military drills in waters around Taiwan, and investors this week are expected to pay attention to earnings results from several tech heavyweights as well as the latest economic data on exports and GDP. The TAIEX closed at 15,036.04 points on Friday, posting a weekly increase of 0.24 percent from 15,000.07 on July 29, Taiwan Stock Exchange data showed. Over the same period, the FTSE TWSE Taiwan 50 Index, which comprises Taiwan’s top 50 stocks in terms of market capitalization, closed up 0.93 percent at 11,750.15 points, while the Formosa Stock Index, which measures

Pharmaceutical start-up AcadeMab Biomedical Inc (研生生醫) said it has been developing a COVID-19 antibody drug, an endeavor not being undertaken by many other Taiwanese pharmaceutical firms. The company was spun off from Academia Sinica’s Institute of Cellular and Organismic Biology in 2020 and has only 16 employees. It has set its sights on the innovative field of the monoclonal antibody treatment of tumors. The start-up began developing antibody drugs in January, after seeing that COVID-19 vaccines could not effectively protect people from new variants of SARS-CoV-2, AcadeMab Biomedical chief strategy officer Pearl Fong (俸清珠) said in an interview with the Taipei Times

FORECAST EXCEEDED: China’s curbs on some Taiwanese goods are unlikely to affect trade given inter-reliance in the electronics industries, a finance ministry official said Exports last month spiked 14.2 percent to US$43.32 billion, the second-highest increase on record and the 25th consecutive month of gains, driven by global demand for electronics used in high-performance computing and vehicles, the Ministry of Finance said yesterday. The ministry expects the trend to sustain this month and beyond, although the pace could slow due to inventory corrections for laptops, smartphones and other consumer electronics. “The July results proved stronger than expected despite rising fears over economic uncertainty,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said, adding that a high sales season in the West and stabilized COVID-19 infections in China