Pegatron Corp (和碩) yesterday said that its board of directors has approved an investment of US$164 million for manufacturing equipment and facilities in North America to handle a growing demand from electric vehicle (EV) makers in the US.
The company made the announcement during an investors’ conference call yesterday.
Although it has been reported for months that the Apple supply-chain manufacturer would expand its automotive business to a US-based facility to better serve Tesla Inc, the announcement was Pegatron’s first official confirmation of such an investment.
Photo: CNA
Pegatron chief executive officer Liao Syh-jang (廖賜政) said that the new facilities are to serve three customers, and that a “second phase of expansion” is in the plannng stages, to be announced next year pending approval by the company’s board.
“Automotive electronics is an important business for Pegatron going forward,” Liao said. “We have listened to our customers and brought production closer to where they are. Hopefully, as EV makers ramp up production, our significant investment will help us build trust with our customers.”
Liao declined to specify the location of the planned expansion, saying only that the “new facilities will be somewhere that can reach every part of the US in a day.”
The new plants are to manufacture EV control unit-related components, Liao said.
“We will not be making motors or drive-train-related products, but control unit-related products, which is among the most critical and highly proprietary parts of an EV,” Liao said.
The size and stability of the EV market in North America convinced Pegatron to make the investment, Liao added.
“The US public sector will be buying a lot of EVs. It’s a good opportunity for Pegatron,” Liao said. “The market will be large and it is predictable.”
In addition to EV components, Liao said that the facilities could be used to manufacture other products for the US market.
“EV components are demanding to make because they need to resist high and low temperatures,” Liao said. “We have made a hefty investment, but once our facility is up to EV standards, it will be capable of making other kinds of components without issues.”
Last quarter, after non-operating income declined 81 percent year-on-year to NT$635 million (US$22.81 million), Pegatron posted net profit of NT$2.67 billion, down 61 percent from NT$6.82 billion a year earlier and down 50.2 percent from NT$5.34 billion a quarter earlier, a company filing with the Taiwan Stock Exchange showed.
Earnings per share fell to NT$1 last quarter, from NT$2.61 in the third quarter of last year and NT$2.01 in the second quarter.
VALUABLE STOCK: The company closed at NT$1,005 a share, on demand for AI and HPC chips, and is expected to issue a positive report during its earnings conference Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares rose 2.66 percent to close at a record high of NT$1,005 yesterday. as investors expect the company to continue benefiting from strong demand for artificial intelligence (AI) and high-performance computing (HPC) chips. TSMC is the 19th member of the local bourse’s NT$1,000 stock club, which includes smartphone chip designer MediaTek Inc (聯發科) and electric transformer manufacturer Fortune Electric Co (華城電機). Yesterday’s rally swelled TSMC’s market capitalization to NT$26.06 trillion (US$802.3 billion) and contributed about 211 points to the TAIEX, which closed up 350.1 points, or 1.51 percent, to 23,522.53, another record high, Taiwan Stock
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor
Google on Monday said it is planning to invest in New Green Power Co (NGP, 永鑫能源), a solar energy developer owned by BlackRock Inc, to build 1 gigawatt of solar capacity in Taiwan to supply clean energy for its local data center and offices. “Our investment in NGP, subject to regulatory approval, will serve as development capital toward its 1 GW pipeline of new solar projects, catalyzing critical equity and debt financing for those projects,” Google’s Data Center Energy global head Amanda Peterson Corio wrote on a company blog. It did not disclose financial details. “We expect to procure up to 300 megawatts
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK