Wolfson turns to China as Samsung dents growth
WOLFSON chief executive Mike Hickey hailed the chip maker’s expansion into China today as the Edinburgh-based firm fights back against a slowdown in growth at key client Samsung.
Four Chinese companies signed deals with the audio chip specialist over the past six months, with Wolfson also chalking up agreements with Intel, Lenovo and Sharp.
Hickey told The Scotsman: “Our chips add lots of functions to phones in a very cost-effective manner and so they’re proving popular in China. All four of the companies have the potential to really help grow orders.”
He also highlighted expected growth in the microphone market in the coming months. Wolfson posted a 13 per cent year-on-year rise in second-quarter revenues to $45.4 million (£29.6m), at the lower end of analysts’ expectations for between $44m and $54m.
Chief financial officer Mark Cubitt said: “Turning over $50m [in each quarter] will be key to whether we hit full-year profitability or not.”
Hickey said the demand for chips during the third and fourth quarters of the group’s financial year would depend on how quickly consumers move from third generation to fourth generation smartphones.
FinnCap analyst Lorne Daniel said: “Revenue growth is clearly slowing as key customer Samsung switches focus from high-end to lower-and-mid-market smartphones. To combat this, Wolfson is looking to diversify into more original equipment manufacturers, notably in China.
“The third-quarter sales outlook is quite weak at $40-50m, although it promises improvement within a few quarters.”