Electronics supplier Lite-On Technology Corp (光寶科技) gave a dim outlook for the second half of this year, saying a persistent shortage of key components is likely to dampen demand.
While sales in the second half are expected to exceed takings in the first six months, it could take up to two years for the global technology sector to resolve lingering shortages in semiconductor materials and passive modules, Lite-On chief executive Warren Chen (陳廣中) told shareholders at the company’s annual general meeting on Friday last week.
The shortages are caused by growing demand for automotive electronics, Chen said, adding that end-user product pricing would only go up as businesses pass higher component costs on to consumers and drive down spending.
It would also be more difficult for Chinese manufacturers to make up the shortfall as Beijing tightens environmental standards, he said.
The extent of the component shortfall would become clearer in the third quarter as companies ramp up inventory in time for the back-to-school shopping season, Chen said.
Lite-On’s products mostly use standard specification passive modules, so the scarcity of components would have a limited effect on the company, he said.
However, the shortage has already caused a 1.9 percentage point decline in gross margin in the first quarter, while net income during the period fell to NT$1.04 billion (US$34.32 million), marking the company’s poorest showing for the January-to-March period since 2009, Chen said.
Regarding the escalating US-China trade dispute, Chen said that the company’s exposure would be limited to US-bound shipments of LED components and optical disk drives, with both categories representing only a small percentage of its total revenues.
Meanwhile, the company has made plans to continue expanding into the Chinese market for server storage through its 45 percent-owned Suzhou-based joint venture with China’s Tsinghua Unigroup Ltd (清華紫光).
The company said it would also boost its efforts to optimize smart manufacturing and automation.
Shareholders approved the company’s proposal to distribute a cash dividend of NT$2.92 per share.
That represents a payout ratio of 258 percent based on last year’s earnings of NT$1.13 per share and a yield of 7.69 percent on its closing price of NT$37.95 in Taipei trading on Friday.
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
RSS