Holtek Plans Comprehensive Price Hike of 10-20%; Second-Half Revenue to Outperform First Half

MCU manufacturer Holtek (6202-TW) held its earnings call today (30), where Vice President Pan Chien-chou stated that due to continuously rising wafer foundry and packaging costs, the company is evaluating its first comprehensive price adjustment since the pandemic. Price increases are expected to range from 10% to 20%, depending on product and customer terms, with new prices applied to recent orders and actual revenue contributions anticipated to reflect from next year.

Pan noted that in March this year, Holtek reviewed and adjusted prices on select low-margin projects on a case-by-case basis, which was limited in scope. This latest move, however, represents a broader, more comprehensive pricing strategy.

Holtek’s primary wafer foundry partner is UMC (2303-TW)(UMC-US). UMC has previously notified customers of price adjustments, with new rates taking effect from the second half of this year into next year. Additionally, packaging and testing providers are also raising prices due to tight capacity, with some packaging firms potentially implementing a second or even third price hike in Q3 this year.

Pan admitted that Holtek has absorbed part of the wafer and packaging cost increases thus far. However, with costs expected to rise further in the second half, the company must moderately pass these on to maintain gross margins. The current price adjustment also factors in projected wafer cost changes for next year.

Holtek’s gross margin in Q2 was approximately 45%, but about 3.7 percentage points of that came from a one-time rebate provided by its wafer foundry partner for achieving full-year procurement targets last year. Excluding this factor, the normalized product gross margin for Q2 was around 41%.

Looking ahead to the second half, Holtek aims to maintain gross margins above 40%. As production costs continue to rise, the company will rely on price adjustments and product mix optimization to stabilize margins. In terms of revenue, Q3 is expected to outperform Q2, while Q4 is projected to be roughly flat compared to Q3, resulting in second-half revenue exceeding the first half.

Regarding AI server business, Holtek has entered the 12V server cooling fan BLDC market and is collaborating with major domestic power supply and thermal solution providers. Several end customers are currently validating the products, primarily to replace foreign suppliers, with revenue contributions expected to gradually materialize next year. For next-generation 48V server fan products, Holtek plans to provide samples to customers for testing this year.

In optical communications, Holtek is co-developing MCU solutions with Taiwanese partners, primarily for external laser light source modules under the ELSFP architecture, handling internal module control. Products have been submitted to end customers for validation and are still in the early stages.

In the near term, Holtek’s growth drivers remain security systems, health products, induction cookers, and existing MCU design wins. AI server BLDC and optical communications are expected to contribute to the company’s medium- to long-term operations.