Delta Electronics (Thailand) Pcl said it may replace US$600,000 of defective phone chargers sold to Sony Ericsson Mobile Commun-ications Ltd, its third recall of products from an international customer.
Bangkok-based Delta Thailand supplied 400,000 chargers to Sony Ericsson, the world's fifth-largest handset maker, said Kulwadee Kawayawong, Delta's head of investor relations.
Delta Thailand, a unit of Delta Electronics Inc (台達電子), the world's biggest maker of computer-power systems and chargers, earlier replaced monitors it made for Hewlett-Packard Co and power systems for Compaq Computer Corp, before Compaq was acquired by Hewlett-Packard.
The recall will not "signific-antly" hurt the company's sales and profit because the gross margin from the product was about 15 percent, Kulwadee said. Gross margin shows how much a company earned after paying production expenses.
Mobile-phone chargers and adapters account for about 27 percent of Delta Thailand's sales and Sony Ericsson accounts for about 2 percent of those, Youssef Abboud, an analyst with the Thai unit of UBS AG said in a note to investors.
"Any potential impact on the bottom line is not likely to be significant in the short term," Abboud said in the note.
Still, "the news could substantially hurt the reputation of Delta Thailand and its future relationship with customers."
The chargers have to be recalled because of an overheating chip.
RSS