Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, is to expand the production capacity of its plant in Kunshan, China, in the next two years to meet rising demand from its clients.
“Hypothetically speaking, if the Kunshan plant has 10,000 workers at the moment, the number would double next year and then quadruple the year after that,” Pegatron chairman Tung Tzu-hsien (童子賢) told reporters on the sidelines of the 2015 IT Month opening ceremony in Taipei.
IT Month, an annual fair, is to run through Sunday in Taipei, then move on to Taichung from Dec. 11 to Dec. 16, to Kaohsiung from Dec. 24 to Dec. 29 and to Tainan from Jan. 8 to Jan. 13.
Photo: Chang Chia-ming, Taipei Times
Pegatron has allocated US$300 million for capital expenditure this year, mainly focusing on building new plants in China. The company is yet to finalize its capital expenditure plan for next year yet.
The Kunshan plant previously assembled older-generation iPhones, but Pegatron moved some of the new iPhone production lines from its Shanghai plant to Kunshan this quarter in a bid to ease the burden on the Shanghai plant, according to sources familiar with the matter.
Tung said that the two-year expansion plan for the Kunshan plant would not necessary involve the same product line, adding that if a strong demand for the product does not materialize in the market, Pegatron would adjust its product lines.
When asked if demand for the iPhone 6S is weaker than last year’s iPhone 6, Tung said: “The market is focusing too much on the new model and ignores the fact that the combined demand for new and previous models has not declined.”
“Let us not forget that the demand for the iPhone 4S was still very strong when the iPhone 5 hit the market,” Tung said, adding: “I could only say the situation now is quite similar. Overall, Pegatron has seen the combined orders for new and old iPhone models grow significantly from last year,” he said.
Pegatron chief financial officer Charles Lin (林秋炭) on Nov. 9 told investors that revenue this quarter is expected to jump 30 percent from last quarter’s NT$311.84 billion (US$9.5 billion) and reach a peak for this year.
CIMB Securities Ltd forecast Pegatron’s revenue would grow more than 35 percent quarterly this quarter, thanks to strong smartphone orders from Apple and Asustek Computer Inc (華碩), as well as contribution from new notebook computer models.
Moreover, being the sole assembler for Microsoft Corp’s Surface Pro 4 tablet and the Surface Book laptops, the income from the two products might contribute about 5 percent to Pegatron’s revenue this quarter, CIMB said in a note on Nov. 10.
In the first 10 months of this year, Pegatron’s revenues totaled NT$976.58 billion, increasing 24.12 percent from the same period last year.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is