Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Novatek Microelectronics had a gross margin of 38.19% for the quarter that ended in Dec. 2025 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Novatek Microelectronics Gross Margin % Related Terms
Novatek Microelectronics Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
TPE:3034 vs NVDA, AVGO, MU: Gross Margin % Comparison
For the Semiconductors subindustry, Novatek Microelectronics's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Novatek Microelectronics Gross Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Novatek Microelectronics's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Novatek Microelectronics's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Novatek Microelectronics (TPE:3034) has a Gross Margin % of 38.19% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Novatek Microelectronics and its competitors. This is near median its historical median of 36.32. Over the past decade, Novatek Microelectronics' Gross Margin % has ranged from 28.36 to 49.78. According to the industry distribution chart, Novatek Microelectronics ranks #354 out of 1009 companies in the Semiconductors industry, placing it in the top 35.1%.
Is Novatek Microelectronics' Gross Margin % too high?
Novatek Microelectronics' current Gross Margin % of 38.19% is near median its 10-year median of 36.32. Over the past 10 years, this metric has ranged from a low of 28.36 to a high of 49.78. The Semiconductors industry median Gross Margin % is 29.61. Novatek Microelectronics' value of 38.19% is 29% above this industry median. Based on the distribution chart, Novatek Microelectronics ranks #354 out of 1009 companies in the Semiconductors industry, which is above the industry midpoint. Overall, Novatek Microelectronics has a GF Score™ of 93/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Novatek Microelectronics' Gross Margin % compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Novatek Microelectronics ranks #354 out of 1009 companies for Gross Margin %. This puts Novatek Microelectronics in the upper half of its industry. The industry median Gross Margin % is 29.61. Novatek Microelectronics' value of 38.19% is 29% above this benchmark. Historically, Novatek Microelectronics' own Gross Margin % has ranged from 28.36 to 49.78 over the past decade. While the company's 10-year median is 36.32 vs. the industry median of 29.61, Novatek Microelectronics has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,009 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Novatek Microelectronics's current Gross Margin % of 38.19% is 29% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Novatek Microelectronics and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Novatek Microelectronics's current Gross Margin % is 38.19%, which is near median its own 10-year median of 36.32. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Novatek Microelectronics stock overvalued right now?
Based on GuruFocus' analysis, Novatek Microelectronics (TPE:3034) is currently considered Fairly Valued. The stock's GF Value™ is NT$486.27, compared to a current price of NT$535.00 — trading 10% above its estimated fair value. The current Gross Margin % is 38.19%, which is near median its 10-year median of 36.32 and 29% above the Semiconductors industry median of 29.61. Novatek Microelectronics' overall GF Score™ is 93/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Novatek Microelectronics (TPE:3034), the current Gross Margin % is 38.19% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Novatek Microelectronics (TPE:3034) Overvalued in 2026?
Based on GuruFocus' analysis, Novatek Microelectronics stock appears to be overvalued.
The current stock price of NT$535.00 is trading 10% above its estimated GF Value™ of NT$486.27.
GuruFocus considers Novatek Microelectronics to be Fairly Valued.
Key valuation signals for TPE:3034:
Gross Margin %: 38.19% (near median its 10-year median of 36.32)
GF Value™: NT$486.27 vs. price of NT$535.00 (10% above fair value)
Industry Position: 29% above the Semiconductors median (#354 of 1009)
No single metric tells the full story. See the TPE:3034 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Novatek Microelectronics Corp is mainly engaged in researching, developing, manufacturing and sales of integrated circuit chips speech, communication, computer peripheral, LCD driver IC system, embedded MCU, DSP and system. Its products include Large-sized driver IC, Medium-sized driver IC, and Small-sized driver IC. The revenue of the company comes from flat panel display and integrated circuit design products.
93GF Score
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