Inventec expects its first-half 2018 revenues to grow by a single-digit percentage on year and is planning to cut its overall manufacturing costs by 20% from a year ago in 2018 mainly by expanding its automated production lines, according to company president Maurice Wu.

Inventec has reported consolidated revenues of NT$467.51 billion (US$15.97 billion) for 2017, growing 9% on year with net profit reaching NT$8.73 billion, up 7% on year, and EPS NT$1.88, up from 2017's NT$1.57.

Inventec's fourth-quarter 2017 consolidated revenues were NT$132.68 billion, rising 7% sequentially and 17% on year, while the gross margin was 5% and EPS NT$0.51.

Although the company's smart device and PC shipments both enjoyed growths in the fourth quarter of 2017, some of the smart device orders' weak margins had undermined the company's gross margin performance. For 2018, Inventec will focus on keeping the gross margin above 5%.

Wu also noted that Inventec will invest more resources in its server and smart device product lines in 2018, but will take a conservative approach to its notebook business due to the industry's limited growth. Inventec is also planning to establish R&D centers for the artificial intelligence (AI) and 5G communication technologies, and has already composed teams for the two segments.

Inventec-developed AI technology will be applied to the company's automated production lines, Wu said.

Inventec expects its server shipments to grow by a single-digit percentage on year in 2018, while datacenter servers, which account for 30% of the company's overall server shipments, are estimated to see a double-digit percentage on-year increase.

However, the company's revenues from the server business are expected to remain flat from a year ago in 2018.

As for Inventec Appliances, although the subsidiary had been enjoying strong shipment growths in the past several years, it is expected to see weakening growth in 2018.

Inventec Appliances was originally the sole supplier of Apple's AirPods and HomePod, but Apple reportedly has already started giving orders to some China-based manufacturers and could reduce the order volumes Inventec Appliances can receive for 2018, some market watchers noted.

Inventec's solar business was seriously affected by the US Section 201 case and the company has already taken measures to reduce the impact. The utilization rate of its solar product lines is at 70% in the first quarter of 2018 and may grow higher in the second quarter.