Scooter and motorcycle maker Kwang Yang Motor Co (光陽工業) yesterday said it expects chip constraints to be alleviated by the end of the year at the earliest, after struggling with chip supply since the second quarter.
In addition to chip shortages, rising manufacturing costs due to higher shipping and raw material prices in the first half of this year placed pressure on the company’s profitability, chairman Allen Ko (柯勝峰) said.
“We have been grappling with a chip supply issue over the past few months,” Ko said. “Supply is tight, and we have had to push back shipments by between 20,000 and 30,000 vehicles for overseas markets.”
Photo courtesy of Kwang Yang Motor Co
Demand from the US market has been soaring this year, thanks to the administration of US President Joe Biden’s stimulus packages to revive the economy, Ko said.
“The company’s sales in the US jumped to record highs this year. We could not supply as many vehicles as customers ordered,” because of the chip shortage, he said.
Kwang Yang and its peers are at a disadvantage when securing chip supply compared with smartphone and other electronics makers, due to their smaller market scale, Ko said.
Moreover, chips used in scooters are made using less advanced technologies, but are highly customized, he added.
After some recent positive developments, the company believes “there is a chance the chip shortage could ease in the fourth quarter,” Ko said.
To satisfy foreign customers’ demand, Kwang Yang was forced to source chips on the spot market at prices 10 times higher than normal, Kwang Yang chief executive officer Ko Chun-ping (柯俊斌) said last week.
Due to insufficient chip supply, Kwang Yang has seen its scooter inventory in Taiwan drop to 20,000 vehicles, which is less than half of its monthly sales, it said.
Aside from chips, there is speculation that supply of electric batteries could become tight soon, but Allen Ko said that would not be a serious concern for Kwang Yang as it should be on its suppliers’ priority lists due to the leading position it enjoys in the electric scooter industry, he added.
Kwang Yang mainly sources batteries from LG Chem Ltd.
Allen Ko said scooter sales in Taiwan are expected to plunge 30 percent year-on-year this quarter, worsening from an annual decline of 23 percent last quarter and 10 percent in the first quarter.
The company has also lowered its forecast for scooter sales in Taiwan this year to below 850,000 units, down about 19 percent from the 1.05 million units sold last year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the