Asustek Computer Inc. reported its first quarterly loss in nine years, due mainly to its struggling mobile phone business and a shortage of Intel processors.
The Taiwanese company said that it incurred a loss of NT$2.82 billion (US$91.46 million) in the fourth quarter of last year, when it booked a NT$6 billion one-time write-off from the mobile phone business.
Operating profit margin fell from 3.2 percent in 2017 to 0.8 percent, the company said in a statement.
Late last year, Asustek unveiled a turnaround plan, shifting its focus to gaming phones and smartphones with higher-end cameras, rather than targeting the mainstream market.
“We believe that gaming phones will make up a certain portion of the overall mobile phone market. It is a segment full of potential. We are working with the gaming ecosystem to expand the market,” Asustek co-CEO S.Y. Hsu told an investors’ conference.
The company aims to turn around the mobile phone business in three years, he said.
Asustek plans to launch its second-generation Republic of Gamers smartphone this year after the first model received positive feedback, Hsu said. The gioal is to release a new model of its staple Zenphone series every year.
The company’s PC business would continue to be depressed by a shortage of Intel chips through the first half, but the situation is expected to be alleviate in the third quarter, Hsu said.
Asustek said that it has increased its chip supply from AMD by a low single-digit percentage to reduce the effects of the shortage.
A slump in cryptocurrency mining activity has caused Asustek’s graphic cards inventory to spike, Wu said.
The company expects PC shipments this quarter to slide 5 to 10 percent from last quarter, while component shipments — mainly motherboards — might drop at a quarterly rate of 5 percent.