Novatek Microelectronics (3034) investor relations material

Executive summary

• Q2 2026 net sales reached TWD 28.66 billion, up 23.83% quarter-over-quarter and 9.59% year-over-year, driven by strong customer demand across all product lines.

• Q2 net income was TWD 6.33 billion, up 67.97% quarter-over-quarter and 69.22% year-over-year, with EPS at TWD 10.4.

• Q2 gross margin was 42.42%, up 3.36 percentage points sequentially and 6.12 points year-over-year, exceeding guidance.

• Consolidated revenue for the first half of 2026 was TWD 51.8 billion, slightly down year-over-year; net income for H1 was TWD 10.095 billion, up from TWD 9.003 billion.

• The company operates as a single segment focused on integrated circuit design for flat panel displays.

Financial highlights

• Gross profit for Q2 was TWD 12.16 billion, up 34.48% quarter-over-quarter and 28.05% year-over-year.

• Operating income for Q2 was TWD 6.47 billion, up 60.53% quarter-over-quarter and 34.06% year-over-year.

• Operating expenses increased to TWD 5.69 billion in Q2, up from TWD 5.01 billion in Q1.

• July 2026 revenue was TWD 10.296 billion, up 26.8% year-over-year and 2.73% month-over-month.

• Basic EPS for H1 2026 was TWD 16.59, up from TWD 14.80 year-over-year.

Outlook and guidance

• Q3 2026 revenue guidance: TWD 30–31.2 billion at an exchange rate of 1-32.

• Q3 gross margin expected in the 38.5%–41.5% range; operating margin between 19%–22%.

• Sequential revenue growth expected in Q3, driven by Edge AI vision chips and smartphone inventory build-up.

• TV, monitor, and notebook demand expected to decline in Q3; tablet and non-China mobile phone demand to grow.

• The company is evaluating the impact of new IFRS standards effective in 2027 and 2028, with no material impact expected from current adoptions.