Novatek Microelectronics Corp
TWSE:3034
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
478
640
|
| Price Target |
|
We'll email you a reminder when the closing price reaches TWD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Novatek Microelectronics Corp
You don't have any saved screeners yet
Dear investors, analysts and media, good afternoon. Welcome to Novatek 2021 First Quarter Online Investor Conference. This is David Chen, the Vice President and company's spokesperson. I'll be the host for today's conference. Hope everyone is doing well, outperforming the market and remaining healthy, despite the challenging environment. Since the pandemic is not yet contained, we'll continue to use live audio webcast and hopefully we'll be able to host in-person conference in the near future. Please be reminded to send in your questions. The agenda for today's event will be as follow. First, I'll be reporting Novatek's first quarter result in English. After that, our Vice Chairman, Mr. Steve Wang will provide more details on our Q1 results and Q2 guidance. Following that will be our Q&A session, as mentioned earlier, if you have questions, you can send them to us, our IR Director, Mr. Tony Tseng will be processing and reading out the questions one at a time both in Chinese and English, and our Vice Chairman Steve Wang, CFO Mr. Chou and I, will answer all your question in Chinese first and then will be translated into English.
As usual, please take a look at our safe harbor notice. So let's start with our 2021 Q1 financial highlights. Our net sales in Q1 was TWD 26.37 billion, up Q-o-Q 17.43%, from TWD 22.45 billion Y-o-Y up 56.1%, from TWD 16.89 billion in Q1 2020. Net gross profit in Q1 was TWD 11.51 billion, up 34.76% from last quarter TWD 8.54 billion and up 105.17% from TWD 5.67 billion in Q1 2020. Our gross margin in Q1 was 43.64%, up 5.61 percentage point Q-o-Q from 38.03%, Y-o-Y up 10.44 percentage point from 33.3%.
Our operating expense in Q1 was TWD 4.3 billion, up 13.34% Q-o-Q, from TWD 3.79 billion, Y-o-Y up 42.85% from TWD 3.01 billion. Q1 operating income was TWD 7.21 billion, up Q-o-Q 51.86% from TWD 4.75 billion, Y-o-Y up 177.23% from TWD 2.6 billion. Our net profit margin in Q1 was 27.35%, up 6.2 percentage point Q-o-Q from 21.15%. Y-o-Y up 11.95 percentage points from 15.4%. Q1 net income was TWD 5.88 billion up Q-o-Q 61.22% from TWD 3.64 billion, Y-o-Y up average 165.71% from TWD 2.21 billion.
Overall Q1 EPS was TWD 9.66 versus last quarter TWD 5.99 and last year Q1 TWD 3.63. Please take a look at our income statement. We will start to break down our quarterly revenue in the 3 product lines starting from Q1 this year. So the 3 main product line will be, SoC which is also the non-driver portion, then we have the LDDIC which is the large display driver IC and the SMDDIC is the small medium display driver IC. As you can see that in Q1 2021 SoC accounts were 33% of our sales, LDDIC accounts for 30% and small medium DDIC accounts for 37% of our sales.
We have just released our April sales number. The April sales comes down to TWD 11.08 billion month-over-month up 16.31%. Y-o-Y up 69.37%. As you can see the SoC accounts for 34% of our revenue and driver IC accounts for 65% of the revenue.
So 2021 accumulated revenue from January to April is TWD 37.45 billion Y-o-Y up 59.8%. Comparing our 2021 and 2020 monthly sales, we can see here that there is a significant Y-o-Y growth for the first 4 months of this year. Next, let's look at other key financial numbers. Our cash and cash equivalent in Q1 was TWD 29.08 billion increase by Q-o-Q by 27.11% from TWD 22.88 billion. Y-o-Y increased by 45.82%, from TWD 19.94 billion. Account receivable Q1 was TWD 16.11 billion increased Q-o-Q 20.49% from TWD 13.37 billion and Y-o-Y up 16.4% from TWD 13.84 billion.
Inventory, Q1 was TWD 9.7 billion, Q-o-Q up 18.93% from TWD 8.16 billion, Y-o-Y up 10% from TWD 8.8 billion. Short term loans in Q1 was TWD 1.45 billion. The fun tribe is a recap of our recent major events. Novatek Board of Directors approved the AGM date on June 8, this year. Second, Novatek Board of Directors approved cash dividend for 2020 TWD 15.6. And also on Novatek underdisplay fingerprint IC has been adopted by leading smartphones OWMs in China and will start volume production in Q2. And Novotek was also selected as constituent stock of FTSE for good, since Taiwan ESG index. This slide shows our historical dividend and PR ratio for your reference. As you can see that 2020, our dividend would be TWD 15.6, the PF/PE ratio will be 80.33%. Novatek will continue to maintain a stable PR ratio policy moving forward.
And now I'll turn over the call to our Vice Chairman, Mr. Steve Wang to provide us more details on Q1 results and Q2 guidance. [Foreign Language]
[Foreign Language]
Thank you, Steve. Let me translate what just Steve said in English. Regarding the Q1 revenue despite as you can see that, despite Q1 being the low season, Novatek has delivered a decent quarterly top-line growth and the main reason is as follows, first of all it's continue of momentum from work from home demand, and secondly both SoC and DDIC unit shipment were not sequentially and thus exceeding our guidance.
And as to Q1 margins, Q1 margin was 43.6% up 5.61 percentage point Q-o-Q. This is mainly due to the following reasons: First, because of ASP adjustment to reflect our rising costs. Secondly, our continuous effort in the improvement of our product mix to higher margin products. As we all know the capacity is pretty tight and we are trying our best to adjust a product to benefit both our customers and ourselves. And looking at the Q2 outlook, as you know, many countries have already started to provide vaccination and hopefully the pandemic, will be contained soon, but due to the pandemic, it has speed up the digitization process where the work from home, learn from home, or the home entertainment will become norm. The related demand will continue to thrive, we'll continue to keep a close watch to the demand changes.
As we enter Q2, this high seasonality, we expect market to be strong. And all the product lines, across the board will grow Q-o-Q, DDIC and SoC. So based on the above our guidance for Q2 is as follows: The top line revenue will be within the range of TWD 33 billion to TWD 34 billion at an exchange rate of USD1 to TWD 28. Gross margin between the range of 45% to 48% range. Operating margins will be 29.5% to 32.5% range and as mentioned earlier, all our product line will grow sequentially, so we are expecting both SoC and DDIC to have a similar growth rate. That will be the guidance for Q2.
Now we'll move on to Q&A session. Please be reminded to send in your questions and Tony will read them up first in Chinese and then we'll answer in Chinese and then I will use English to ask again and will translate the answer into English.
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language]
First quarter gross margin continue to post the upside to your guidance and still sequential grew strongly quarter-over-quarter. What kind of product would you raise the price and by what kind of magnitude and can you also provide NRE amount for first quarter?
As you all know, the first quarter cost has gone up in the our supply also has price. So in order to reflect that cost, our AAC also went up. And as mentioned also earlier, we also improve our product mix to have some kind of margin.
The second question was on the NRE. Okay. The first quarter NRE is roughly around TWD 186 million.
[Foreign Language]
[Foreign Language]
The second question is about the operating expense ratio. We noted this ratio was relatively stable during 2020 over the quarter by lease ratio came down in the first quarter in terms of both quarter-over-quarter and the year-over-year. Could you provide some factor behind these improvement?
The first quarter operating expense actually, proportionately came down, it's mainly because of the top line growth. Okay. And, but in terms of absolute amount, it's still pretty healthy and are basically company is very careful in managing the cost. So this is also the reason.
[Foreign Language]
[Foreign Language]
Okay. A question states about your product growth, we've noticed SoC in first quarter grew strongly in both year-over-year and the quarter-over-quarter. Just wondering if you can provide more color about this? The factor behind this strong growth and also by your major product line we're seeing the SoC?
The growth -- or reason behind the growth is we adjusted our ASP to reflect the costs and the other thing is that within the SoC all the product line like TV controller, scaler, timing controller, power management IC all of them actually sequentially went up Q-o-Q
[Foreign Language]
[Foreign Language]
Okay. The next question is about the driver business. We noticed you started to disclose the breakdown, we're seeing that size, but it's a small medium size driver in the first quarter. Just wonder if you can provide more detail regarding the quarter-over-quarter growth for these product lines. And also, could you provide some unique trend for your major product lines we're seeing in these segments, such as OLED driver and the TDDI.
Well looking at the large band driver, small size panel, both of them actually went up more than 10% and can double-digit growth. And in terms of unit, all that unit went up a little bit and TDI was kind of flat.
[Foreign Language]
[Foreign Language]
Okay. Then we shifted gear through your balance sheet, we noticed your inventory dollar.
Let me answer that in English first, okay. The regarding the inventory issues, the inventory went up in Q1, but basically the 2 reasons behind that, first of all, the cost went up for products, so that will increase the inventory. And the other thing is that the SoC, the non-driver back and cycle time actually, lead time actually increased. So that will also impact the inventory level. And the third, our revenue is also growing and because of that we need to increase our inventory level, to cope with the growth on the top-line.
[Foreign Language]
[Foreign Language]
That question about the financials is about the non-breaking item, we noticed was minus TWD 200 million for quarter 4, but became positive TWD 76 million in first quarter. Just wonder what's the major reason behind?
The major reason, is due to the sum dividend income in the first quarter, as above TWD 100 million versus FX loss of slightly over TWD 200 million, quarter 4. [Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language]
Could you share your view on the foundries supply situation as well as if the tightness will continue how do you reduce the impact on the market?
Well the -- regarding the 8-inch and 12-inch capacity and tightness, currently what we see is that both 8-inch and 12-inch are still very tight and we are seeing that demand is still increasing and is pretty strong and the expansion -- capacity expansion is still very limited. And we think, till the end of this year, we don't think the situation will be resolved. So it will be a issue for the whole of this year. As to how to cope with such situation, what we are now doing is that we are trying our best to improve our product mix and to have more higher margin product -- to supply more higher margin products. And on the other hand, as everybody can see that, a lot of our customers, they're having some supply mismatch but for Novatek, we supply not just driver, we also supply timing controller, power management, some of the system chip and scaler. We supply a lot of our solution, so what we are doing is that we are bundling those into like a kit supplier, a bundled sale, so that we can help our customer to resolve the problem and also at the same time benefit Novatek. So in a bid to long run, we'll try our best to improve our product mix, to benefit both our customers and Novatek at the same time.
[Foreign Language]
[Foreign Language]
Okay the next question is a follow-up question is about there is a lot of discussion about the aggressive capacity expansion from the next trip in China and then that will also cause maybe a more easy supply at the driver side, could you also give some comment on these concerns,
Well, regarding the capacity expansion on the mature nodes, some of the foundry, will keep a close watch to the progress of expansion but ensure we don't think there'll be any major impact at this moment. The reason is that, as you can see that all the major product lines are experiencing shortage, not just DDIC, for example CIS, MCU, power, fingerprint and a lot of these are still using the -- a more legacy notes and all these are still in shortage. Okay. So if you look at the capacity as a whole, the shortage will not be resolved in a short period of time. So foundry supplier, they will definitely try the best to adjust the product mix in favor. Okay. And the other thing is that we are seeing that on the advanced nodes, it is also --there is also a constraint on the advanced nodes. And a lot of those basically we'll try -- they'll try to satisfy the 5G, Full HD, like the 120. 144 hertz or the flexible OLED which used 55-nano, or 28-nano. So a lot of those will move to it. I mean, our first priority meet those demands. And on the other hand what we see now is China panel supplier already exceeded 50% of the global and then we can see, Taiwan and China together already have more than 70%, 80% and then Korean is existing the TFT panel market. So panel customers will maintain dual sourcing both China and Taiwan. So therefore the will be healthier and ASP we will be more stable. And then for us as a major solution provider -- a total solution provider. We just -- without not supplying only driver IC but we also have the whole set of solution, which we have mentioned earlier. And so this kind of trend will definitely benefit major chip player like Novatek.
[Foreign Language]
[Foreign Language]
The follow-up question about the capacity. Could you provide some view of volume of all your foundry capacity growth in 2021 versus 2020, also your second half versus first half.
As we mentioned earlier, the 8-inch to 12-inch capacity is still very tight. So we are expecting to get a little bit increase Y-o-Y meet our demand. And what we are seeing now is that the second half of this year, we also expect to have little more supply than the first half. But again, still not enough.
[Foreign Language]
[Foreign Language]
Could you also provide some kind of guidance, quantitative number for your lead time, for your finished order, order fulfillment ratio for your business?
Well, the overall demand is still strong and we are seeing that we not able to meet the demand 100% but has the nature of the business, when the demand is strong overbooking is inevitable. Okay. It's just, to what degree. Okay. And as you know, the current situation is that a lot of our customer experiencing mismatch. It's not just driver. So it's very difficult for them to fill the gap. Okay. So what we're seeing is now is that the inventory level at this moment is still healthy. So we don't think this is a big issue at this moment.
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language]
In terms of all the progress for your foundry capacity in 2022, do you need to do some prepayment, and also how about project for UNC in Taiwan for 12-inch set. And also any guidance for your foundry capacity growth for next year versus 2021?
Well, yes, again, the foundry capacity supply is indeed tight. And so, our end customer actually requested us to have a long-term stable supply. So because of this, we have earlier engagement with our suppliers, starting to negotiate or to requests for 2022 supply. And so far what we see now is that, for next year 2022, the Y-o-Y increase of capacity is still very limited, still very limited, but look at the future demand and not just the DDIC, but we also see DR, AR, VR or the some of the flexible OLED, a lot of these and logic product, all of them actually the demand, actually very strong. So in order to have a stable and long-term supply to help our customer -- to support our customers, we are still in the process of negotiating with the various supplier, hopefully to secure more capacity, so it's still in the process.
[Foreign Language]
[Foreign Language]
Yes. Could you also talk about the situation, particularly for the age demand-supply situation and how does Novatek resolve this issue?
Well, as everybody knows that the for the past few years the 8-inch capacity expansion was very limited. So that was one of the issue that cost the current tightness. And all the past one year or so, a lot of the people are moving some of the product from 8-inch to 12-inch but not all of them but partially tried to move from 8-inch to 12-inch. So what we see now is that even though we are doing the 8-inch to 12-inch, but I think the capacity issue shortage will not be result in short period of time. And for Novatek, we are trying to best to and hopefully we'll be able to increase some extra capacity in 2022 and we are working on it.
[Foreign Language]
[Foreign Language]
Yes. You mentioned about some cost push up in the first quarter, just wonder if this situation will continue in the second quarter even into the second half of next year.
What we experience is that in Q2 some of the product line or some of the nodes cost went up as to the second half or next year, it will depends on the supply and demand situation. So it's hard to tell at this moment, but currently what we are seeing that is the situation is still very tight, and the price in -- cost in Q2 has gone up.
[Foreign Language]
[Foreign Language]
Also, other than the foundry, I also wonder if there is any timing of potential price hike for your other raw material supply.
Yes, besides foundry the Packm, packaging and all are also experiencing tightness. So what we see now like the packaging like for some of the materials for packaging like substrate and wired bonder, lead time actually has been extended. So yes, I mean, some of these costs are also going up.
[Foreign Language]
[Foreign Language]
I could you also share your EBITDA ratio for the end demand as well as the inventory level across different application?
Well, looking at the mobile or TV, notebook, tablet, automotive demand currently all these product lines are still very strong and we don't see any sign of coming down or softening or weakening at this moment, it's still maintaining a pretty strong demand.
[Foreign Language]
[Foreign Language]
Could you provide some initial thoughts for the outlook for the quarter 3, as you had a strong first quarter and also on the second quarter guidance.
I mean, as mentioned earlier, the foundry is tight and we cannot fulfill the demand but what we are seeing that a lot of the system maker they still expect the second half the third quarter high seasonality. The demand to go up. So based on such kind of scenario we do expect the second half demand continues to be strong.
[Foreign Language]
[Foreign Language]
Earlier mentioned about strong growth into the second quarter for both SoC and the driver, just wonder if you can rank the quarter-over-quarter growth among these 3 product line.
While all 3 product lines are experiencing growth, so, all of them will be over 20%. So they aren't that much different, basically all the product line cross the Board are growing at the same rate.
[Foreign Language]
[Foreign Language]
The first question about the light side driver, just wonder if you can provide more detail about the growth behind the sequential growth, quality of on the ASP for first and second quarter.
I think the second-quarter growth will be driven by both a unit growth and a ASP reflection.
[Foreign Language]
[Foreign Language]
Could you talk about the capacity allocation or your competitive landscape among your peers for lifestyle driver.
Well, we can't comment too much on our competitors, but for us as a total solution provider. We understand our customer needs because they're having some mismatch issues. So what we are doing is we're trying to bundle our solution and supply them of total kit solution to maximize efficiency, so that they can maximize or utilize the supply that they get to maximize their revenue. So that's what we are doing, and hopefully will be helpful for our customers.
[Foreign Language]
[Foreign Language]
Just also wonder you mentioned about your price hike in first quarter and into the second quarter, just wonder if you can provide some gross margin range for your large-sized driver or the ranking among your product lines.
Well, regarding the large-sized driver, basically I mentioned earlier, the cost has gone up we also have reflected of the AST reflections of to meet the cost hike. So basically, the margin has improved.
[Foreign Language]
[Foreign Language]
Okay. Now you shipped to the small medium size group, the first question will be about TDDI pricing and the margin trend?
Well, this is similar to large panel driver so because for the past many quarters the demand being strong and also our cost has gone up, so we also have ASP to reflect the cost. So basically, the margin has improved.
[Foreign Language]
[Foreign Language]
Could you also provide more color for the TDDI market size in your quantity for whole year and also from the second quarter?
Well the unit shipment for TDDI because of the foundry tightness, so Q2 would be kind of flat, but for the whole of 2021, we are expecting the unit shipment to be slightly up.
[Foreign Language]
[Foreign Language]
The second group questions about the OLED provide some growth as well as. Your whole year outlook for your OLED driver shipments?
Well, as mentioned earlier the 5G trend is pretty clear. So most of the 5G or the high-end phone would be adopting OLED as the panel solution. So we are seeing that a lot of the new design in are adopting OLED as the panel. So what we are -- we do expect second half shipments to be better than the first half. As for Q-o-Q, we think it will be slightly up Q-o-Q, but it will be more in the second half.
[Foreign Language]
[Foreign Language]
A follow up question about OLED driver, could you provide the update timetable for your OLED TDDI.
Our OLED TDDI development pretty smooth. And so far we already -- the samples are already and we are ready to provide the sample to our customers, but we are working closely with our panel maker if everything goes well, hopefully next year, it will go into mass production, but it will all depends on the panel maker progress.
[Foreign Language]
[Foreign Language]
Also on that you can share the high-trade OLED driver, given your earlier comment of TDDI band.
As you know the OLED using a more advanced nodes and the foundry supply on those nodes are still very tight. So it won't be -- it cannot be result in short period of time. So ASP should be pretty stable and healthy.
[Foreign Language]
[Foreign Language]
Could you also share the update on your auto driver?
Well, the automotive driver, besides the pure driver, our recently they are saying there is a strong request for TDDI driver for the automotive and currently, again the foundry is very tight. So we don't expect to have a very big change in terms of supply for the automotive.
[Foreign Language]
[Foreign Language]
Okay. You also mentioned about your fingerprint product in your PPT. Could you provide some update on this product line and also on the gross margin versus your average?
Yes, I mean our fingerprint solution the of under the display already began into small volume production in Q1. So we expecting Q2 to get into volume production. And as for the margins again, because of the tightness in the foundry or in the supply chain. So we expect the margins to be decent margin. So shouldn't be a problem.
[Foreign Language]
[Foreign Language]
Any color on the recent announcement by [indiscernible].
We don't think there is any impact on our business, so we'll continue to develop our products internally as scheduled.
[Foreign Language] Can you provide some update for your new products such as wearable OLED Driver or mini-LED driver and others?
Yes, our wearable OLED Driver solutions already designed in and is getting ready for mass production. But again, due to the tightness of the foundry, we did -- we did some adjustment. So, we saw our expected Q3, it will go into mass production.
[Foreign Language]
Regarding the mini-OLED driver, this product lines also in mass production now. But the revenue contribution is still small compared to the other product line.
[Foreign Language]
[Foreign Language] Could you also provide more detail about your SoC product line growth in terms of quarter-over-quarter, as you guided that you will -- all grow over 20% quarter-over-quarter in the second quarter?
Yes. As mentioned earlier, and within the SoC we have TV controller, we have like timing controller, we have surveillance and all of these we are expecting the unit shipment to grow in Q2. But again because of the tightness in the foundry, it will cap the growth, basically the growth should be higher than that but because of the foundry tightness, it has been kept. So what we've done is, we internally we did some product allocation, resources allocation. So that will help to maintain the SoC to grow at a decent rate.
[Foreign Language]
[Foreign Language]
Could you repeat the question again?
[Foreign Language]
[Foreign Language]
Could you tell about, for your SoC product, the cost push up as well as your ASP or your margin trend, across SOT lines.
Yes. Besides the some of the cost that we mentioned earlier, back end of the foundry costs for the SoC, there is another area that the D-RAM. The cost also went up quite a bit. So basically we will adjust our ASP to reflect the cost, so basically it will be helpful for our margin also.
[Foreign Language]
[Foreign Language]
You mentioned about the SoC growth in the second quarter just wonder can you break down the quarter-over-quarter growth between the quantity versus ASP.
Well, regarding the SoC because of the tightness and the price cost hike, what we expect is that the ASP increase will be higher than the unit increase Q-o-Q.
[Foreign Language]
[Foreign Language]
Makes me wonder if you have seen any negative impact already given the recent resurgence of COVID-19 in both India and do particular for smartphones.
Well regarding either India or Brazil, the pandemic definitely has some impact on the manufacturing and also on the consumer. So we see that there are some impact, but because these area is just a part of the whole smartphone market. So because of the current supply-demand tightness so that kind of impact is not that significant.
[Foreign Language]
[Foreign Language]
Wondering you provide your second for the revenue guidance of TWD 33 billion to TWD 34 billion and also you've just reported the April revenue of TWD 11 billion and just wonder does that imply your monthly revenue will be pretty flattish or you had the early buying before the China May holiday.
I think it's both. Okay. The China May Holiday, there is some plan. Okay. And again because the supply and demand tightens, so our growth has been cut to TWD 33 billion to TWD 34 billion.
[Foreign Language]
[Foreign Language]
You have increased your driver price over the past couple of quarters, which is a pretty of normal over the past time of year during the cycle. Could you provide your view on the partnership with your P&L customer at this moment?
So looking at our panel customers. As you can see that along the panel maker doing pretty well. The financially business wise we're doing pretty well and their ASP has gone up quite a bit and the secondly that we mentioned earlier, we do see a structural change in the panel industry. As I said earlier, now eventually there'll be just, China and Taiwan will be the major panel supply so accounts for a big part, major part of the business and then. So moving forward dual sourcing will be a trend. So the overall market will be more stable more healthier, so because of this kind of changes in scenario, the panel maker relationship with Novatek will be stronger than before because of the current situation. Both of us want to have a longer relationship or partnership not just with us but with our supplier. So that's why we are now working very closely with our supplier hopefully to secure more capacity for our customers. So that will be a win-win situation.
[Foreign Language]
[Foreign Language]
We know that you are expanding your gross margin quite rapidly over the past couple of quarters and even exceeding your peers at SoC growth. Just wonder if these kinds of margin rate are helpful in the near future.
Well, pursuing a higher margin is as a design house, it's always looking for higher margins, but on the other hand, there is other area that we need to work to enhance and that's basically the technology. So we also working very hard to develop our research and better technology to support our customers. So what we are now doing the strategically, we are working on developing products that would be favorable to Novatek. We are going to enhance our technologies, we will expand our product lines, applications and also customer base. And mentioned earlier we also going to bundle solution to increase customer stickiness. So -- and also to resolve the problem, they don't have the mismatch issue. Okay. And we also want to strengthen our long-term strategic partnership with our customers, so that moving forward, we will be able to provide more better, better value, better competitive product for our customers and we can work together in the long-term partnership.
[Foreign Language]
Okay. So since there is no more questions, so we're going to wrap up today's Q1 investor conference. Thank you so much for joining in. [Foreign Language]