Yageo price hike could be more than 30 percent - Taipei Times
Mon, Feb 05, 2018 - Page 16 News List

Yageo price hike could be more than 30 percent

By Chen Cheng-hui  /  Staff reporter

One month after Yageo Corp (國巨) raised prices on some chip resistor products, the nation’s largest passive components manufacturer is hiking its prices again, starting today, as pressure from price increases in raw materials and a tight supply of laminates persists.

In a notice to customers on Thursday signed by Yageo’s managing director for greater China, Edgar Chen (陳佐銘), the company announced that it plans to raise the prices of large thick film chip resistors and array chip resistors by “between 20 and 30 percent, or even higher.”

Prices are increasing also because of higher labor and environmental costs, as well as negative foreign exchange rates, the notice said.

The latest hikes are bigger than the firm’s previous increases of between 15 percent and 20 percent on certain chip resistor products, which were announced on Jan. 10.

Analysts have said that the chip resistor market’s tight supply could continue throughout this year.

According to a report by the Chinese-language Commercial Times on Thursday, several other chip resistor suppliers have announced price hikes since the beginning of this year, including Chilisin Electronics Corp (奇力新), Walsin Technology Corp (華新科), Ralec Electronic Corp (旺詮), Viking Tech Corp (光頡) and China’s Fenghua Advanced Technology Holding Co (風華).

The benefits from Yageo’s two price hikes for chip resistors this year and its price increases for multilayer ceramic capacitor products announced late last year might emerge this quarter, boosting its revenue by 35 percent to NT$9.89 billion (US$338 million) from a year earlier, First Capital Management Inc (第一金投顧) said in a client note on Friday.

Accordingly, Yageo’s first-quarter net income might grow further to NT$2.58 billion, up 213 percent year-on-year, with earnings per share of NT$7.36, First Capital said.

Yageo’s stock price closed up 3.63 percent at NT$400 in Taipei trading on Friday. Since the beginning of the year, the stock has risen 13.31 percent, compared with the main bourse’s 4.54 percent increase over the same period, Taiwan Stock Exchange data showed.

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