Chyng Hong Electronic CEO Tseng Kuo-hua stated at an earnings call on the 4th that the company's communication power supply products for low-orbit satellites have begun shipping, with customer orders doubling initial expectations and demand described as urgent and intense. The Taiwan-based power supply manufacturer is actively procuring materials and adding production lines at its Thailand factory to increase capacity. The communication power supply segment is expected to remain strong through the first quarter of next year, with new household ground equipment products having started shipping in September.
According to the company, the communication power supplies primarily serve household ground reception equipment, small vehicle charging units, and mobile power systems for vessels in the low-orbit satellite market. Industry sources indicate the products supply the global low-orbit satellite sector, though Chyng Hong does not comment on individual customers. Analysts estimate the communication power supply segment's revenue contribution may rise from 8% to double digits this quarter.
Chyng Hong Reports Q3 Financial Results
Chyng Hong Electronic reported third-quarter net profit of NT$144 million, down 82% quarter-over-quarter and 80% year-over-year, with earnings per share of NT$0.36. The decline was attributed to memory chip shortages and price increases that caused customer order delays. For the first three quarters, net profit totaled NT$1.363 billion, down 15.5% year-over-year, with earnings per share of NT$3.4.
CEO Tseng acknowledged that overall laptop market demand declined 20% this year and may face an additional 10% drop next year. However, he noted strong demand from server and low-orbit satellite power supply segments.
Thailand Factory Expands Production Capacity
In response to increased orders for communication satellite products, Chyng Hong plans to expand capital expenditure to NT$1-1.5 billion next year, primarily focused on expanding server and satellite power supply production at its Thailand facility. The Thailand factory is currently adding production lines and procuring materials to meet demand.
The company stated that low-orbit satellite production capacity next year will double compared to this year to fulfill customer orders. New household equipment products that began shipping in September generated order volumes twice the company's initial projections.
Company Forecasts Revenue Mix Shift
Tseng stated that demand remains strong for AI workstation applications from data centers and enterprise servers, with high-power supplies ranging from 3,200 watts to 5,500 watts experiencing particularly robust demand. The company expects revenue from server power supplies and communication satellite power supplies to double next year, with the combined revenue contribution from these two applications projected to reach 30% of total revenue.
Analysts project that communication power supply revenue as a percentage of total sales will increase from the current 8% to double digits this quarter as production ramps up at the Thailand facility.
FAQ
What did Chyng Hong Electronic announce about its low-orbit satellite business on the 4th?
Chyng Hong Electronic CEO Tseng Kuo-hua announced at an earnings call on the 4th that the company's communication power supply products for low-orbit satellites have begun shipping, with customer orders doubling initial expectations. The company is expanding production capacity at its Thailand factory to meet the urgent demand.
How did Chyng Hong Electronic perform financially in Q3?
Chyng Hong reported third-quarter net profit of NT$144 million, representing an 82% decline quarter-over-quarter and an 80% decline year-over-year, with earnings per share of NT$0.36. The company attributed the decline to memory chip shortages, price increases, and customer order delays.
What is Chyng Hong's capital expenditure plan for next year?
Chyng Hong plans to expand capital expenditure to NT$1-1.5 billion next year, primarily allocated to expanding server and satellite power supply production capacity at its Thailand factory. The company stated that low-orbit satellite production capacity will double compared to this year.
