SOLOMON SYSTECH (ASX: 02878) has announced that the group is expecting to record an unaudited consolidated net loss attributable to shareholders in the range of approximately $3.8 million to $4.1 million for the six-month period ending June 30, 2026. This contrasts with an unaudited consolidated net profit attributable to shareholders of approximately $4.0 million for the corresponding period ended June 30, 2025.

Key Factors for the Expected Loss

The primary reasons for the anticipated unaudited consolidated net loss in the first half of 2026 are attributed to several key factors. Firstly, a decline in sales revenue, gross profit, and gross margin was noted. This reduction is primarily due to increased production costs stemming from bottlenecks within the semiconductor supply chain in the global chip ecosystem, which constrained output despite growing demand. Secondly, the company experienced an increase in research and development expenses for new products. Lastly, the appreciation of the Renminbi contributed to higher operational costs in Mainland China.

Maintaining Market Position Amid Challenges

Despite the projected decline in net profit compared to the first half of 2025, the board has emphasized that the group managed to maintain a stable integrated circuit (IC) shipment volume during the 2026 period. This performance demonstrates the group's capability to sustain a stable market share even under unfavorable market conditions. Concurrently, the group remains committed to allocating resources to support various research and development projects to preserve its long-term competitiveness. It will also continue to implement its current effective and stringent cost-control measures to enhance operational efficiency.