Sat, Jul 07, 2018 - Page 12 News List

Yageo posts record-high monthly result

‘REASONABLE PRICES’:The company said it could supply 95% of components sold by Murata, which is exiting electronics, but would expand capacity to meet demand

By Lisa Wang  /  Staff reporter

Yageo Corp (國巨), the nation’s biggest passive component supplier, yesterday reported record-high revenue for last month as it benefited from persistent supply constraints and increased its output of high-margin components.

Revenue more than tripled to NT$8.54 billion (US$280 million), compared with NT$2.46 billion in June last year, marking the fourth consecutive month of rising revenue.

During the quarter ending on Saturday last week, revenue jumped 159.4 percent to NT$19.24 billion from NT$7.83 billion in the same period last year, Yageo said.

The company in a statement attributed the growth to “solid demand” and across-the-board and expansion of its high-end components capacity.

The company said it saw month-on-month increases in sales of passive components used in almost all applications, from automotive, industrial devices, Internet of Things, data storage and artificial intelligence applications to computer and consumer electronics.

Demand for components used in high-end smartphones in China also showed strong growth, Yageo said.

The company said it expects that improving product portfolios and strong demand from new applications, such as automobiles and industrial devices, would continue to drive its profit growth this year.

Yageo plans to release second-quarter earnings next month.

Last month’s revenue echoed Yageo chairman Pierre Chen’s (陳泰銘) upbeat outlook for the firm at an investors’ conference last month, where he said that the company’s book-to-bill ratio was three, meaning that orders were twice as high as its shipments.

Some of the order growth came as Japanese rival Murata Manufacturing Co has started a shift away from electronics to the automotive sector, Chen said.

Yageo is capable of supplying 95 percent of the items that used to be supplied by Murata, including high-capacity multilayer ceramic capacitors in the upcoming two years, he said.

Yageo has also benefited from a spate of price hikes.

Chen last month said that the company aimed to expand capacity to satisfy demand at “reasonable prices” in the medium to long term.

Before the latest industry boom, passive component prices had been sliding at an annual rate of 15 to 20 percent, forcing most suppliers out of the market, Chen said.

Prices have only just bounced back to the levels seen seven years ago, he said.

Yageo shares rallied 5.38 percent to close at NT$1,175 in Taipei trading yesterday. They have surged 2.3 times since the beginning of the year.

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