Wed, Jun 21, 2017 - Page 12 News List

Pegatron expects robust second half

EXPANSION:The company has doubled its capital spending this year to boost its Chinese plants’ production capacity in time for the peak season, CEO S.J. Liao said

By Lauly Li  /  Staff reporter

With its three main product lines’ growth momentum recovering, Pegatron Corp (和碩) expects its business to pick up significantly in the second half and lift its full-year performance.

“The second half of the year would represent the peak for Pegatron’s operations [this year]. Our expanded production capacity is in place,” chief executive officer S.J. Liao (廖賜政) told reporters yesterday after the company’s annual general meeting in Taipei.

Pegatron, one of Apple Inc’s iPhone assemblers, invested US$400 million over the past few months, mainly to purchase new equipment to boost its Chinese plants’ production capacity for communications, consumer electronics and computing products, Liao said.

This year’s capital expenditure was twice the size of last year’s US$200 million and was the largest since 2013, the company said.

“We have almost completed the execution of the US$400 million capital expenditure. The expanded production capacity will start contributing to revenues in the next three months,” Liao said.

To cope with the manufacturing expansion, Pegatron is increasing its workforce in China and has been recruiting staff since the Lunar New Year holiday, Liao said.

Pegatron chief financial officer Charles Lin (林秋炭) said the company expects to have 40,000 to 50,000 more workers in the second half compared with the first half amid an anticipated spike in demand during the peak season.

Pegatron’s revenue jumped 18.16 percent annually to NT$78.63 billion (US$2.59 billion) last month, while cumulative sales in the first five months of the year rose 2.88 percent to NT$399.31 billion.

Liao said he was optimistic that the annual growth momentum would extend through the rest of the year, with full-year sales increasing from last year’s NT$1.15 trillion.

Asked to comment on whether government efficiency would affect Pegatron’s desire to invest in Taiwan, Pegatron chairman Tung Tzu-hsien (童子賢) said the company is planning to increase investment at its Taoyuan plant to meet contact lens subsidiary Pegavision Corp’s (晶碩) growing business scope.

“Action speaks louder. We take action to express our willingness to continue investing in Taiwan,” Tung said.

Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘) last week slammed the government bureaucracy, saying he would not invest in Taiwan unless it is necessary.

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