Inventec Corp (英業達), one of the main assemblers of Xiaomi Inc (小米) handsets, has recently completed an expansion of its plant in Nanjing, China, with annual production capacity set to double to 860 million handsets this year, an executive said.
To cater to rising demand from Xiaomi, the Taiwanese contract electronics maker in June last year approved a US$50 million expansion of the plant, with construction being completed earlier this month, David Ho (何代水), chief executive officer of Inventec’s subsidiary Inventec Appliance Corp (英華達), was quoted as saying by the Chinese-language Commercial Times and Economic Daily News.
The plant mainly assembles smartphones, but it is also manufacturing Internet-of-Things (IoT) devices for other clients, Ho said.
The expansion allowed the annual production capacity of the plant to jump 110 percent to 86 million handsets per year from the previous 41.5 million units per year, Ho said.
Production utilization rate at the Nanjing plant is about 70 percent, he said, adding that it would increase to more than 80 percent after a major client’s new handset launches later this quarter.
The company said it has about 9,000 employees at the plant and is hoping to have more than 10,000 by next quarter to meet production requests.
Inventec invested more than NT$30 million (US$887,049) in building a plant in India last year and it plans to invest more in that facility this year, company chairman Richard Lee (李詩欽) told reporters on Dec. 15 last year.
Inventec spent US$200 million in capital expenditure last year and plans to have a similar amount of capital expenditure this year, it said, without elaborating on how much of the fund would be allocated to investment in India.
Xiaomi is expected to launch its new flagship handset Mi5 next month in Beijing, with both Inventec and the handset’s other assembler — Hon Hai Precision Industry Co’s (鴻海精密) subsidiary FIH Mobile Ltd (富智康) — preparing the first batches.
Inventec secured more orders than FIH from Xiaomi, as it shipped 35 million to 40 million handsets last year, accounting for more than 50 percent of Xiaomi’s total shipment of 70 million smartphones.
Market analysts said they expect Inventec’s revenue to jump more than 10 percent to NT$100 billion this quarter from NT$89.3 billion in the same period last year, driven by the launch of Xiaomi’s new handset and shipments for Fibit Inc’s wearable device.
Inventec’s notebook business accounted for 41 percent of the firm’s total revenue, while sales from its handheld devices contributed 12 percent of total revenue, the firm said.
There are nearly 20 handheld device clients besides Xiaomi working with Inventec Appliance, Ho said, which should significantly increase Inventec’s sales contribution.
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