Lite-On Technology Corp (光寶科技) last week approved investment plans to boost the company’s subsidiaries in Vietnam and Jordan, seeking to mitigate the effect of escalating US-China trade tensions.
The company, which produces most of its goods in China, said it would inject no more than US$77.4 million to expand manufacturing capacity at wholly owned subsidiary Lite-On Vietnam Co Ltd, it said in a filing with the Taiwan Stock Exchange on Tuesday last week.
The company would also give US$20.14 million to KBW-LITEON Jordan Private Shareholding Ltd, which would raise its stake in the Middle East-based company from 99.77 percent to 99.86 percent, it said in a separate filing.
Lite-On in June last year said its Jordanian subsidiary had won a contract to supply LED street lamps and that the first shipments were made in the second half of last year.
US tariffs on Chinese goods are expected to affect the company’s top line by less than 2 percent and should not exceed 5 percent if the rate is expanded next year as expected, Lite-On chief executive officer Warren Chen (陳廣中) told an investors’ conference.
The company has been developing its production base in Vietnam for five years, Chen said, adding that it is entering its third decade in Thailand, while a new facility in Kaohsiung would begin operations next year.
Lite-On reported its strongest quarterly results in the past two years for the July-to-September period, as new product launches helped boost margins.
Net income rose 50 percent quarter-on-quarter to NT$2.64 billion (US$85.89 million), with earnings per share of NT$1.14.
Excluding the company’s smartphone camera business, which was transferred to a Chinese buyer, revenue rose 17 percent quarter-on-quarter to NT$53.4 billion, driven by rising demand for power electronics for data centers, LED lighting, memory and artificial intelligence applications, Lite-On said.
Compared with the previous quarter, gross margin rose 3.9 percentage points to 15.8 percent, while operating margin rose 3.4 percentage points to 6.2 percent.
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