Letter to Shareholders

Dear Shareholders,

In 2023, the overall business activities of the Company showed a decline in both revenue figures and sales quantity. Due to disruptions in the supply chain during the pandemic, the IPC industry experienced a shortage of supplies. Customers’ excessive expectations of stockpiling resulted in them still using up their inventory from the previous year, leading to insufficient purchasing power. On the other hand, the PC industry faced a decline in overall order volume due to the economic downturn. However, there is a possibility of recovery in 2024. In contrast, the Gaming industry experienced significant growth due to receiving large orders for miniaturized power supplies from NB ODM. The networking and cloud-related industries showed slight growth in performance. Overall, in 2023, the Company sold approximately 14.44 million units, which was a significant decrease in sales volume. However, due to the higher unit price of new models and high-power products, the consolidated operating revenue was NT$13,179,581 thousand, a decrease of only 5% compared to the NT$13,895,870 thousand in 2022. The results of operations in 2023 and the business outlook for 2024 are explained below:

I. Results of Operations in 2023

(I) Business Plan Implementation Results

FSP’s consolidated operating revenue for 2023 was NT$13,179,581 thousand, an decrease of 5% compared to consolidated operating revenue of NT$13,895,870 thousand for 2022; the net income before tax for 2023 was NT$782,509 thousand, an decrease of 18% compared to net income before tax of NT$951,767 thousand for 2022; net income after tax for 2023 was NT$639,684 thousand, an decrease of 19% compared to net income after tax of NT$791,036 thousand for 2022; basic earnings per share before and after tax for 2023 were NT$3.8 and NT$3.2, respectively.

Unit: NT$ thousands; %
Item 2023 2022
(after restatement)
Change, by Amount Change, by Percentage
Operating Revenue 13,179,581 13,895,870 (716,289) (5.15%)
Gross Profit 2,404,027 2,308,783 95,244 4.13%
Operating Income 468,813 542,320 (73,507) (13.55%)
Non-Operating Income and Expenditures 313,696 409,447 (95,751) (23.39%)
Net Income Before Tax 782,509 951,767 (169,258) (17.78%)
Net income 639,684 791,036 (151,352) (19.13%)

(II) Budget Implementation Status

The Company did not formulate a financial forecast for 2023.

(III) Analysis of Financial Revenue and Expenditures and Profitability

Unit: NT$ thousands; %
2023 2022
(after restatement)
Percentage of Increase (Decrease)
Financial Revenue and Expenditures Operating Revenue 13,179,581 13,895,870 (5.15%)
Gross Profit 2,404,027 2,308,783 4.13%
Net Profit After Tax 639,684 791,036 (19.13%)
Profitability Analysis Return on total assets (%) 3.24 3.86 (16.06%)
Return on equity (%) 4.51 5.80 (22.24%)
Ratio of income before tax to paid-in capital (%) 41.79 50.83 (17.78)%
Net profit margin (%) 4.85 5.69 (14.76%)
Earnings Per Share (NT$) 3.20 3.86 (17.10%)

(IV) Research and Development

The R&D results in 2023 were as follows:
  • Efficient Titanium 850/1KW ATX power supply 2023/Q1 MP.
  • Research and develop Titanium 1.3/1.6KW products 2023/Q4 MP.
  • Research and develop Gold SFX Gen5 750/850W power supply, 2023/Q1 MP.
  • Flex 100~300W power supply compliant with ATX 3.0.
  • ATX 250~500W power supply compliant with ATX 3.0.
  • Compact PD 65W >1W/cc lipstick machine products.
  • 45W/65W wall plugs, multi-country interchangeable wall plugs, and desktop products.
  • PD 3.1 180W 36V output models.
  • Networking products with 50/60/65W 12V.
  • CRPS 2400W, 2700W and 3000W high-power density devices.
  • CRPS 300W, supporting NEBS compatibility testing.
  • 1U Slim 250W, 300W and 400W Industrial Control/Networking Redundant power supply.
  • 200W @ 3”x 6.3” series industrial power supply.
  • 550W PoE power supply.
  • 950W PoE power supply.
  • 300W Series Models Industrial Application power supply.
  • 45W C14 Desktop Adapter (Class I) products.
  • 60W/65W C14 Desktop Adapter (Class I) products.
  • 60W/65W C8 Desktop Adapter (Class II) products.
  • 260W @ 3”x 5” Open Frame products.
  • Mobile charging station Proto Type.
  • 1+1 E-bike Charger Proto Type.
  • 700W Fan-less waterproof charger.
  • 3300W Stack design.
  • Mobile energy storage Emergy 3K+–1500W/110Vac/2.0kWh.
  • Mobile energy storage EnerX 3000–3000W/230Vac/2.5kWh.
  • Off-grid inverters LightUp series - 2KW/3KW/5KW/6KW/8KW/11KW.

II. Summary of 2024 Business Plan

Looking ahead to 2024, the development trend of AI and image processing cards is clear, and the power consumption of related networking or servers will be increased. For networking, high-speed computing, server power, unbranded CRPS power supply, FSP has a complete product line and will introduce high-power new products in response to this situation. In the gaming industry, the Company will launch high-power titanium products and slim adapters to meet market demands. In addition, the desktop computer market and the industrial computer market downturn in the previous year is expected to improve after inventory reduction this year. Apart from Mainland China and Taiwan, the Company established a third production base in Vietnam last year, expecting boosting production capacity and supply Southeast Asia as well as cater to specific manufacturing location requirements from European and American manufacturers. The overall target for total sales of power supply quantity is 20 million units.

III. Future Development Strategy

FSP is committed to its corporate mission of “maximizing value for customers, employees, and shareholders with innovative services and high-quality products.” Continuously research and develop advanced technology, develop power sources for innovative industries, to provide high value added power products. Since last year, AI chips have been increasingly utilized in related products, leading to a significant increase in power demands and the output of power supplies. Within the framework of environmental and sustainable development, the role of high-power and high-efficiency power supply products becomes even more important. FSP will allocate more and better research and development resources, dedicating to create high-power and high-efficiency power supply products with technological strength, meeting market demands for durability and efficiency, as well as the explosive growth in the AI industry.

IV. Impact of the External Competitive Environment, Regulatory Environment, and Overall Business Environment

FSP has set up the Sustainable Development Committee under the jurisdiction of the Board of Directors. With regard to current domestic and foreign laws and regulations that govern our operations, and our management team will continue to pay close attention to policies and laws on corporate governance issues that may affect the Company’s financial and business. We shall provide guidance and review environmental issues related to the environment between operations and production, and social issues related to coexistence and mutual prosperity with society and stakeholders on all levels.

FSP is committed to protecting the environment with green energy, respecting customers, and creating a high-quality work environment. We seek to become the most reliable partner for customers, consumers, suppliers, and employees and maximize value for customers, shareholders, and employees.

I wish you good health and all the best
Chairman: Cheng, Ya-Jen
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