Passive component supplier Walsin Technology Corp (華新科技) yesterday said that net profit in May increased about sevenfold to an all-time high of NT$1.46 billion (US$47.73 million) from a year ago, as new applications and short supply propelled prices.
The profits translated into earnings of NT$3.01 per share, it said in a company filing with the Taiwan Stock Exchange yesterday.
The firm was asked to release its latest earnings report as the stock has rallied more than 40 percent over the past week to NT$450 in Taipei trading yesterday.
In the first five months of this year, Walsin accumulated net profit of NT$3.89 billion, or earnings per share of NT$7.87, compared with NT$2.5 billion, or earnings per share of NT$5.15, a year ago.
Revenue during the January-to-May period increased to NT$13.76 billion, a record high.
Walsin expects the supply crunch to deepen next quarter as the electronics industry enters its peak season, chairman Chiao You-heng (焦佑衡) told a shareholders’ meeting last month.
Demand for multilayer-ceramic capacitors (MLCC) and chip resistors has surged due to widening applications, such as facial recognition for smartphones, and advanced autopilot systems in vehicles, the company said in May.
The anticipated explosive growth in passive component demand would fuel company revenue growth this year and next year, as already reflected in the past few quarters, company president Ku Li-chin (顧立荊) told investors in May.
Prices have been trending upward, because passive components have been undervalued and there has not been any significant expansion in capacity, he said.
Bigger rival Yageo Corp (國巨) on Monday said that net profit in May surged 107.3-fold year-on-year to NT$3.5 billion, almost equaling the company’s share capital of NT$3.51 billion, with earnings per share of NT$9.95.
In addition to new application demand, a shift in strategy from electronics to the vehicle sector by Japanese rival Murata Manufacturing Co could increase demand for MLCCs from other manufacturers by 20 percent and would further squeeze an already tight supply, the company added.
Yageo chairman Pierre Chen (陳泰銘) said the company is capable of supplying 95 percent of the items originally supplied by Murata, including high-capacity MLCCs.
There are no technological barriers for Yageo, he said.
The stock prices of Walsin and Yageo yesterday pulled back 1.85 percent and 5.28 percent respectively to close at NT$450 and NT$1,165 in Taipei trading.
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