The tight supply of production capacity will last until next year, and Realtek predicts that chip prices may continue to rise

 IC design company Realtek held a legal meeting yesterday (26th) and said that its products continue to be in short supply. At present, in the second half of this year and even most of next year, the supply of both wafer foundries and packaging and testing plants will still be very tight, and chip prices are expected to continue to rise next year.

According to Juheng.com, Realtek Vice President Huang Yiwei pointed out that the second quarter benefited from strong demand and increased average selling prices of products, which led to an expansion in revenue. In particular, sales of PC-related products were quite strong in the second quarter, which increased the proportion of PC revenue from 34% to 36%. The gross profit margin was also higher than normal levels due to product portfolio optimization.

Regarding the supply chain, Huang Yiwei believes that in the second half of this year and even most of next year, there will not be a large amount of new production capacity opened up by either wafer foundries or packaging and testing plants, so it will still be difficult to obtain it. However, given that new production capacity is occasionally opened up, Realtek will try its best to seize it. It is reported that the company's overall inventory level is still low.

As the overall supply chain continues to be tight, downstream manufacturers are still facing the risk of being unable to ship due to shortages. Huang Yiwei expects that this phenomenon will not be solved in the short term and will continue for some time, but the shortage of supply will be beneficial to Realtek's product portfolio and can effectively increase product prices and profits.

Looking ahead to next year, Huang Yiwei said that demand is still greater than supply, and even the continued rise in prices in the second half of this year and next year is within expectations. However, Realtek will not directly raise prices for customers just because suppliers raise prices, but will regularly review costs and communicate with customers before reflecting this to them.