Yageo Corp (國巨), the world’s biggest supplier of chip resistors, saw its shares fall by 8.61 percent yesterday, despite posting another record-breaking quarterly net profit as it hiked its prices due to supply constraints.
In the quarter that ended on March 31, Yageo made NT$4.26 billion (US$144 million), which was more than the company’s share capital of NT$3.51 billion. That represented a 4.3 times increase from NT$818.4 million in the first quarter of last year.
On a quarterly basis, net profit jumped 40 percent from NT$3.02 billion.
Earnings per share surged to NT$12.15 last quarter, compared with NT$1.62 a year earlier and NT$8.62 the previous quarter.
Gross margin climbed to a record high of 51.4 percent last quarter, mainly driven by rising contributions from high-end products for cars and industrial devices.
A persistent tight supply of multilayer ceramic capacitors (MLCC) and chip resistors also helped, Yageo said in a company statement on Tuesday.
The firm’s figures for last quarter beat some analysts’ expectations.
First Capital Management Inc (第一金投顧) yesterday said that Yageo’s gross margin beat its estimate of 46 percent and its earnings per share were also higher than the NT$10.13 it anticipated.
“The significant increase in last quarter’s net profit is primarily attributable to the newly unveiled pricing scheme for MLCC,” First Capital said in a research note.
MLCC accounted for 60 percent of Yageo’s revenue totaling NT$11.02 billion in the first quarter of this year, delivering a gross margin of about 60 percent, the investment consultancy said.
First Capital raised its revenue forecast for Yageo to NT$51.8 billion from NT$47.9 billion, in anticipation that the supply crunch would worsen after Japan’s Kyocera Corp announced its decision to stop supplying standard-type MLCC, it said.
This would prompt Yageo to start a new round of price hikes later this year, it added.
Yageo shares dropped to NT$584 yesterday in Taipei trading, but they have rallied about 65 percent since Jan. 2, when the stock closed at NT$354.
The firm is expected to boost capacity by between 25 and 30 percent this year to cope with robust demand, Taishin Securities Investment Advisory Co (台新投顧) said.
“The capacity expansion should help increase Yageo’s revenue this year,” Taishin Securities Investment Advisory said in a research note yesterday. “We expect supply of passive components to be tight during the second half of this year based on information from the supply chain.”
The investment advisory expects Yageo to make NT$49.63 billion in revenue this year, representing year-on-year growth of about 54 percent.
Yageo last month said it spent NT$12 billion in the final quarter of last year to expand its capacity to cope with rising demand.
Given its rosy profit outlook, Taishin Securities Investment Advisory and First Capital raised the target price of Yageo to NT$720 and NT$756, respectively, until December.
ASE Technology Holding Co (ASE, 日月光投控) yesterday launched its second testing facility in San Jose, California, to expand advanced chip testing capacity such as burn-in testing to satisfy customers’ rising engineering needs for emerging semiconductor applications, such as artificial intelligence (AI) and high-performance computing (HPC). ISE Labs Inc, a fully owned subsidiary of ASE, would operate the advanced testing facility. When added to its first facility in nearby Fremont, ISE would double its available research-and-development lab and business space to 150,000m2 in hopes of boosting the US semiconductor supply chain, the company said in a statement. “As the semiconductor manufacturing supply chain reshoring
VALUE: TSMC’s market capitalization far exceeds the combined size of all the Latin American companies on MSCI Inc’s benchmark for emerging markets Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$420 billion equity rally this year would get a valuation test this week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts. The world’s biggest contract chipmaker would probably report a 29 percent increase in second-quarter net income on Thursday, according to the median estimate of analysts surveyed by Bloomberg. More importantly, analysts from JPMorgan Chase & Co to Morgan Stanley expect it to also raise its full-year sales guidance, justifying another round of valuation expansion. Just like Nvidia Corp, TSMC has become a favorite artificial intelligence (AI)-bet for investors with
ASSASSINATION ATTEMPT: The previous shooting targeting a US president or major party candidate was the 1981 incident targeting then-US president Ronald Reagan Saturday’s shooting at former US president Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory would increase this coming week, investors said yesterday. Trump was shot in the ear during the rally in Pennsylvania on Saturday in what the authorities were treating as an assassination attempt. Trump, his face spattered with blood, pumped his fist moments after the attack, and his campaign said he was fine after the incident. Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the US dollar higher and positioning for a
President William Lai (賴清德) yesterday thanked memory chipmaker Micron Technology CEO Sanjay Mehrotra for his trust and continued investment in Taiwan, in a rare public meeting with a senior foreign tech executive. It is very unusual for Taiwan’s president to have publicized meetings with senior foreign tech executives, despite the nation being home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), whose chips help to power the surge in artificial intelligence (AI) applications. Lai thanked Mehrotra for “showing trust and support for Taiwan” in a video released by the Presidential Office. “I want to thank Micron for its long-term