Kinsus Interconnect Technology Corp (景碩科技), an IC substrate maker for semiconductor companies, is expected to report better-than-expected earnings for this quarter, thanks to contributions from Ajinomoto Build-up Film (ABF) substrate orders, as well as because its Chinese subsidiary, Piotek Computer (Suzhou) Corp (百碩電腦), reported reduced losses, SinoPac Securities Investment Service Co (永豐投顧) said on Friday.
Kinsus is a subsidiary of Pegatron Corp (和碩), an assembler of iPhone and iPad products. Kinsus specializes in manufacturing ABF substrates (which account for less than 25 percent of its revenue), bismaleimide-triazine (BT) substrates (less than 45 percent) and printed circuit boards (less than 12 percent). Subsidiary Pegavision Corp’s (晶碩光學) contact lens business accounts for 15 percent if its revenue.
In the first quarter, Kinsus posted net income of NT$78.84 million (US$2.65 million), up 131.67 percent from a quarter earlier, with earnings per share (EPS) of NT$0.18.
The company reported a net loss of NT$744.51 million a year earlier.
First-quarter revenue was NT$5.89 billion, down 5.52 percent from the previous quarter, but up 19.78 percent from a year earlier.
Kinsus gave a bright outlook for this quarter, despite uncertainties caused by the COVID-19 pandemic, citing continued ABF substrate supply shortages and robust BT substrate demand in the near term.
The company said in an earnings call in April that the ABF substrate supply shortage was expected to last until the end of this year, as the industry is focused more on multi-core CPU computing, resulting in larger die size requirements and the use of more ABF capacity.
Last week, the company reported that revenue for last month increased 43.61 percent year-on-year to NT$2.35 billion on the back of new ABF substrate capacity and higher graphics processing unit (GPU) orders from a US client, while DRAM and NAND flash memory demand remains healthy.
Cumulative revenue in the first five months totaled NT$10.3 billion, up 22.35 percent from a year earlier, it said.
SinoPac forecast that Kinsus’ revenue would grow 14.7 percent quarterly and 30.6 percent annually to NT$6.76 billion in the April-to-June quarter, which falls within the company’s guidance of a 10 to 15 percent quarterly increase.
Net income is expected to increase 266.4 percent quarter-on-quarter to NT$289 million, with EPS of NT$0.64, SinoPac said.
“For the second half of 2020, with antenna-in-package (AiP) and ABF products for a US handset brand yielding fruit, the company will leave the substrate-like PCB (SLP) depreciation burden behind and return to growth,” SinoPac analyst Liao Kuan-chieh (廖貫捷) said in a research note.
SinoPac said Kinsus would become profitable this year after reporting a net loss of NT$2.03 billion last year, or a net loss per share of NT$4.52, as the firm’s major growth drivers mainly come from growing markets for 5G smartphones, base stations and GPUs, which would trigger more demand for BT and ABF substrates, Liao said.
The company’s AiP projects should also be a growth driver in the next few years, given the product’s higher layer count, which could raise average selling prices and expand gross margin in the long term, the analyst said.
With 5G construction and SLP depreciation not being a drag anymore, “we raise our estimate of 2020 EPS to NT$2.98, compared with our earlier estimate of NT$2.14,” Liao said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS