Realtek Semiconductor (2379) investor relations material

Executive summary

• Q2 2026 revenue reached TWD 37.6 billion (NT$37,553 million), up 3.1% quarter-over-quarter and 17.7% year-over-year, driven by stable demand and supply chain-driven price increases, especially in DRAM.

• Net profit was TWD 3.81 billion (NT$3,805 million), with a net profit margin of 10.1%, down 2.1ppt year-over-year and 1.8ppt sequentially.

• EPS for Q2 2026 was TWD 7.42, a decrease of TWD 0.20 year-over-year and TWD 1.02 sequentially.

• Gross margin declined to 47.0%, down 2.7 percentage points sequentially and 3.2 points year-over-year, mainly due to higher memory costs and product mix.

• Inventory turnover days increased slightly to 107, reflecting ongoing OSAT capacity constraints amid strong AI server demand.

Financial highlights

• Q2 revenue: TWD 37.6 billion (+3.1% QoQ, +17.7% YoY).

• Gross margin: 47.0% (down 2.7pp QoQ, down 3.2pp YoY).

• Operating profit: TWD 3.73 billion (9.9% margin, down 2.0pp QoQ); operating income was NT$3,725 million, down 2.7ppt YoY.

• Operating expenses: TWD 13.9 billion (37.1% of revenue), up 15.8% YoY and 1.2% sequentially.

• Cash and current financial assets stood at NT$62,788 million at quarter-end.

Outlook and guidance

• Q3 demand expected to remain resilient overall, with PC segment under pressure from higher DRAM/NAND costs and supply constraints.

• Networking demand stable, supported by broadband upgrades and enterprise refresh cycles.

• Consumer electronics outlook mixed: TV demand softened post-World Cup, home appliances steady, game consoles weak due to high prices.

• Automotive demand steady to stronger in H2, led by EV growth and automotive Ethernet adoption, especially in Europe.

• Gross margin expected to gradually recover through supply optimization, product design improvements, and selective price adjustments.