Casetek Holdings Ltd (鎧勝), which supplies metal casings for Apple Inc’s MacBook and iPad models, yesterday reported a 19.6 percent annual decline in earnings to NT$14.49 per share last year, affected by falling margins.
The results came as the company’s gross margin dropped 6.4 percentage points to 26 percent last quarter from the previous year’s 32.4 percent due to increasing labor costs and new products development expenses, pushing down net income last quarter 15 percent year-on-year to NT$1.5 billion (US$47.76 million), the company said.
“The development expenses for our main client’s new products dragged down gross margin last quarter,” chief financial officer Jonathan Chang (張昭平) told an investors’ conference.
Chang said the US client’s changes in product design also increased Casetek’s manufacturing costs and affected its production efficiency.
To meet the client’s growing demand, Casetek had also ordered new facilities last quarter, but the firm was unable to install the necessary facilities in time due to equipment shortages, Chang said.
As a result, Casetek had to increase hiring in China and boosted labor costs last quarter, which affected last quarter’s gross margin by 1.5 percentage points to 2 percentage points, he said.
Casetek chairman Tung Tsu-hsien (童子賢), who doubles as chairman of Apple product assembler Pegatron Corp (和碩), said last quarter’s margin performance was weaker than the previous year, but Casetek’s yield rate improved significantly year-on-year, while shipments also reported annual growth.
Tung said that because Casetek is a relatively “young” company, he hopes investors do not judge its performance from only a short period of time, saying: “It is more important to find a good position for Casetek in the market first and then to make it stronger.”
The first half of the year is usually Casetek’s slow season, Tung said, adding that he expects the demand for metal casings to rise in the second half of this year, thanks to increasing demand from Casetek’s top five clients.
The company’s board last year approved capital expenditure of US$505 million this year and Tung said the company plans to spend the money mainly on industrial automation, equipment purchases, land acquisitions and new plants.
Casetek chief executive officer Gary Chuang (莊育志) said the company expects to ship metal casings for notebook products this spring and deliver metal casings for smartphone vendors in the second half of this year.
The shipments for tablet products this year are forecast to be flat from last year, Chuang said, without giving specific figures.
Pegatron plans to share its insert-molding techniques and machines with Casetek to help the metal casing supplier meeting demand, Tung said.
The insert-molding techniques are known for being adopted for Apple’s iPhone models.
Casetek’s smartphone segment currently accounts for the majority of its total revenue, but the firm plans to increase the revenues contribution from smartphones to 40 percent within one year, Chuang said, without offering specific revenue breakdowns.
Casetek shares dropped 1.40 percent to NT$176.5 in Taipei trading yesterday, underperforming the TAIEX, which gained 0.17 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”