Electronic components maker Lite-On Technology Corp (光寶科技) yesterday reported that first-quarter net profit rose 7.3 percent from a year earlier to NT$1.57 billion (US$52.42 million), despite the impact from the COVID-19 pandemic.
While revenue dropped 20.88 percent on an annual basis to NT$32.58 billion due mainly to a production halt in China, its gross margin climbed to a seven-year high of 14.5 percent, thanks to an improved product mix and operating efficiency, the company said.
“The gross margin would be 0.2 percentage points higher if we do not take into account losses incurred by subsidiary Silitech Technology Corp (閎暉),” Lite-On vice chairman and chief operating officer Warren Chen (陳廣中) told investors at an earnings conference in Taipei, adding that the company’s performance was affected by continuous losses from its solid-state drive (SSD) business.
Sale of the SSD unit to Japan’s Kioxia Holdings Corp was delayed by the pandemic, but the deal is expected to close by the end of this quarter, Chen said.
Giving a rosy outlook for business this quarter, Chen said the company is operating at full capacity across its plants in China to satisfy customers’ mass orders.
“Clients are pressing us everyday [because] the market is undersupplied, with sales channels empty,” Chen said.
The company forecast an 18 percent sequential increase in sales this quarter, given more working days than last quarter.
However, order visibility for the second half of the year remains low, as the pandemic continues to affect European and US markets.
“We will have to see how products perform this quarter at end markets,” Chen said.
Facing investors’ concerns over rising prices of passive components, Chen said Lite-On has found a local supplier offering more “reasonable” prices, adding that the company has enough inventory to see production through this quarter.
Lite-On is also aiming to increase its production outside China from 15 percent to more than 20 percent within the next two years.
The company has moved part of its production of motherboards and keyboards to a new manufacturing facility in Vietnam, which is expected to contribute less than 10 percent of total shipments this year, Chen said.
Lite-On last year relocated production of data center components and chargers to a plant in Kaohsiung amid the trade tensions between the US and China.
The company also has production sites in Thailand, Mexico and India.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
RSS