Yageo Corp (國巨), the world’s third-largest multilayer ceramic capacitor supplier, said that it had acquired France-based Schneider Electric’s sensor business in a deal worth about 723 million euros (US$788.26 million).
The acquisition of Telemecanique Sensors early this month matched Yageo’s shift in strategy to offer premium products, the company said in a statement on Tuesday.
Yageo expects the deal to broaden its product portfolio and raise its gross margin substantially next year, given that Telemecanique Sensors focuses on making higher-margin chips for industrial devices, the company told investors during an online conference on Oct. 26.
Photo: CNA
Yageo’s gross margin fell to 33.2 percent last quarter from 38.5 percent a year earlier, as weak demand resulted in lower factory utilization.
However, the company said it remained on target to boost gross margin to 40 percent in the long term.
Telemecanique Sensors — a leading global specialist in the design, development and delivery of mission-critical electromechanical and electronic sensors — registered a compound annual growth rate of 5.5 percent in revenue over the past three years, with annual revenue averaging US$330 million, the statement said.
North America and Europe are its biggest markets, contributing about 70 percent to Telemecanique Sensors’ revenue, Yageo said.
Telemecanique Sensors operates five manufacturing sites in France, Indonesia, Mexico and the US, it said.
Yageo said it is still grappling with a severe inventory correction cycle, which has depressed customer demand, adding that it would take another one or two quarters for customers to deplete excess inventory before needing to restock.
Unlike previous downcycles, it is taking longer than expected for customers to digest inventory, as sluggish demand from the Chinese market has compounded already unhealthy inventory levels and weak end-demand in the post-COVID-19 period, Yageo said.
Yageo CEO David Wang (王淡如) said this quarter and next quarter would mark the trough for the firm.
Revenue this quarter would contract about 5 percent sequentially, Wang said.
In the best-case scenario, next quarter’s revenue could reach a similar level to this quarter, he said, adding that the forecast did not factor in benefits from acquiring Telemecanique Sensors.
Overall, Yageo saw its book-to-bill ratio improve to about 1 this quarter, he said.
The improvement was more evident in its commodity products, which had seen the book-to-bill ratio drop below 1 due to sagging demand, he said.
Demand for high-end products has been stable, he added.
Demand from the computer segment, which includes notebook and desktop computers, smartphone and telecom-related devices, continued to diminish this quarter, Yageo executive vice president of global sales and marketing Claudio Lollini, said.
However, demand for components used in servers, vehicles, and industrial and medical devices is increasing, Lollini said.
Gross margin would be flat this quarter on a sequential basis, while utilization would also be the same as last quarter, with equipment usage for premium products remaining at about 70 percent, Wang said.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS