Catcher Technology Co (可成), the nation’s leading supplier of light metal casings and enclosures for mobile devices, last week reported weaker-than-expected financial results for last year, as well as falling sales in the first two months of this year.
Net income dropped 59.7 percent year-on-year to NT$11.27 billion (US$373.06 million), or earnings per share of NT$14.63, after revenue decreased 4 percent to NT$91.63 billion, the company said in a regulatory filing on Tuesday last week.
Gross margin of 24.3 percent and operating margin of 15.4 percent were both lower than a year earlier due to sliding capacity utilization and reduced prices.
Cumulative revenue in the first two months of this year was NT$9.93 billion, up 18.8 percent from NT$20.41 billion in the same period last year, but last month’s revenue plunged 41.3 percent year-on-year and about 74 percent month-on-month to NT$2.02 billion, the lowest in nine years, company data showed.
Catcher said that its revenue performance was due mainly to the COVID-19 outbreak, as disease-prevention policies hampered its operations and logistics.
JPMorgan Securities (Taiwan) Ltd (摩根大通證券) said that Catcher’s revenue for this month should recover from the previous month thanks to an improving rate of workers returning to production lines at its plants in China.
However, it might still be shy of market consensus estimates by a “big shortfall,” JPMorgan said in a note on Wednesday, without elaborating.
Yuanta Securities Investment Consulting Co (元大投顧) said the company’s lower production scale amid the COVID-19 pandemic could lead to a lower-than-expected gross margin this quarter.
“However, we believe its low gross margin from last year should recover in 2020, with likely better-than-expected iPhone 11 sales, while its high confidence in its business relationships with major clients will enable it to see iPhone shipment growth,” Yuanta said in a note to clients on Tuesday.
Meanwhile, China-based Luxshare Precision Industry Co (立訊精密) is rumored to be expanding its presence in Apple Inc’s iPhone assembly business by as early as next year, with Catcher likely a major partner for metal casing and frame manufacturing, Chinese-language media reported.
Yuanta said that Catcher’s position in Apple’s casing supply chain should remain stable if Luxshare makes the move.
However, JPMorgan said it would not necessarily be a positive development for Catcher, due to potential regulatory approval headwinds and downside risks for market share dynamics.
Catcher shares fell 19.62 percent for the whole of last week and have dropped 16.08 percent so far this year.
EXPECTATIONS: The firm, which is on track to outpace global foundry industry revenue growth, said it expects constrained advanced process capacity amid stronger AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday increased its projected revenue growth for this year to above 25 percent, as stronger-than-expected demand for premium smartphones and artificial intelligence (AI) devices are to drive greater utilization of cutting-edge 3-nanometer and 5-nanometer chips. In April TSMC estimated 21 to 24 percent annual growth. The firm’s revenue growth is on track to greatly outpace the global foundry industry, which is expected to rise about 10 percent this year. “Over the past three months, we have observed stronger AI and high-end smartphone demand from our customers, which is to boost the overall capacity utilization for our leading-edge
INVESTMENT: The company’s planned complex in Texas would be the first 12-inch silicon wafer fab built in the US in more than 20 years, a GlobalWafers official said GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said it secured up to US$400 million in direct funding from the US Department of Commerce under the CHIPS and Science Act for the construction of two new advanced fabs in the US. Its subsidiaries GlobalWafers America and MEMC LLC are to build a 12-inch silicon wafer fab in Sherman, Texas, and another one in Missouri to produce silicon-on-insulator (SOI) wafers used to make leading-edge chips. “With the support of the [US President Joe] Biden Administration, we are honored to be bringing to American shores the world’s most cutting-edge 12-inch semiconductor
Powerchip Semiconductor Manufacturing Co (力積電) yesterday said that net losses ballooned to NT$1.96 billion (US$60.1 million) in the second quarter, as heavy manufacturing costs from a new fab outweighed the improvement in customer demand and factory utilization. That compared with losses of NT$439 million in the first quarter. The company posted a net profit of NT$617 million a year earlier. Gross margin plummeted to 5.3 percent last quarter, from 15.4 percent in the previous quarter and 16.8 percent in the same period last year. It was the weakest since the fourth quarter of last year. The chipmaker blamed heavy depreciation and higher manufacturing
Nikon Corp is fielding strong demand for its legacy chipmaking machines in China, which is mobilizing resources to build its own semiconductor supply chain. Inquiries for the Japanese precision maker’s lithography tools have surged in China, Nikon president Muneaki Tokunari said. The company is set to revamp a lithography machine geared for decades-old manufacturing processes. Its NSR-2205iL1, launching this summer, would serve the market for mature chip technology and Nikon expects to sell more than 10 units of the machine annually, said Tokunari, who is also chief operating officer and chief financial officer. New companies are sprouting up in China to make