Anticipated Stagnation in Leadtek's Second-Half Revenue for the Current Year
Leadtek, a Taiwanese company specializing in graphics cards, AI workstations, servers, virtual desktop systems, and smart healthcare devices, is projecting a positive outlook for the second half of 2022. The company, which is a long-term partner of Nvidia Corp and an authorized reseller of its products, has faced challenges due to delays in Nvidia graphics card shipments.
The delays in Nvidia graphics card shipments have had a significant impact on Leadtek's revenue. In the first half of the year, the company's revenue decreased by 6.2 percent compared to the same period last year and 40.83 percent compared to the second half of last year, reaching NT$1.56 billion (US$51.9 million). However, Leadtek expects the shipping schedule for Nvidia's RTX 50-series graphics cards to return to normal and stabilize in the second half of the year.
One of the products Leadtek is eagerly anticipating is the GeForce GTX 550 Ti, which is expected to lead to significant sales in the coming months. Additionally, larger volumes of products equipped with the RTX PRO 6000 series graphics cards are projected for next quarter. The RTX PRO 6000 series graphics cards are primarily used for professional purposes, such as training AI models, inferencing ability, producing medical images, and other high-end applications.
Despite the foreign-exchange losses Leadtek experienced in the second quarter due to the sharp appreciation of the New Taiwan dollar against the US dollar, the impact was limited by the company's natural hedging strategy. Leadtek expects no foreign exchange loss this quarter.
It's worth noting that US shipments are limited to virtual PC products, which make up only 7 percent of Leadtek's sales. Graphics cards, on the other hand, accounted for about 90 percent of Leadtek's sales last quarter, while virtual PC products contributed about 8 percent.
The eventual deliveries of these products still depend on Nvidia's graphics card supply. Nvidia graphics cards only entered mass production last month, and shipments have been slowed down this month. The tariffs on Leadtek's main products remain uncertain pending the outcome of a Section 232 investigation under the US Trade Expansion Act of 1962.
Despite these challenges, Leadtek is optimistic about the future. The company expects its revenue in the second half of the year to stabilize due to the normalization of Nvidia's shipping schedule for RTX 50-series graphics cards. This, coupled with the anticipated sales from the GeForce GTX 550 Ti and the RTX PRO 6000 series graphics cards, positions Leadtek for a promising second half of the year.
