Sat, Dec 08, 2018 - Page 12 News List

Yageo’s revenue drops to lowest level since April

By Lisa Wang  /  Staff reporter

Yageo Corp (國巨) yesterday said that it has continued to feel the squeeze from US-China trade tensions as revenue last month fell to the lowest level in seven months after Chinese clients cut orders due to concern over market demand.

Revenue last month contracted 14.8 percent to NT$5.38 billion (US$174.44 million), from NT$6.32 billion in October, hitting the weakest level since April, the company said in a statement.

The passive component supplier’s monthly revenue fell for a third straight month since the tensions between the world’s two biggest economies escalated in September.

“Clients from greater China were conservative about market demand and hesitant to place new orders due to uncertainties stemming from the China-US trade dispute. Some clients even reduced [orders],” Yageo said. “The company will be mindful of changes in the [electronic components] industry and in global economies.”

Yageo said it would continue to reduce supply to its distributors so they drive excessive inventories in the supply chain back down to healthy levels.

The world’s No. 3 multilayer ceramic capacitors supplier also partly attributed weakness in demand to seasonal factors.

In the first 11 months of this year, aggregate revenue surged to NT$72.63 billion, compared with NT$28.91 billion in the same period last year, due to severe supply constraints before a reversal in September, company data showed.

Looking forward, Yageo said that it would stick to its growth strategy by optimizing its product portfolio, adding that it is expanding to higher-margin multilayer ceramic capacitors used in automobiles and industrial devices.

Yageo was not the only electronic component maker in the nation that has felt the pinch of the US-China trade dispute.

FocalTech Systems Co (敦泰電子), a supplier of touchpanel controllers, said that the trade dispute has depressed customer demand, putting an extra squeeze on its revenue during the slack season.

An unresolved shortage of wafers has limited the shipment growth of a new type of chip that integrates a display driver with a touchpanel controller, it said.

Shipments of the high-margin chip plunged nearly 30 percent year-on-year, FocalTech said.

Shipments of touchpanel divers and LCD drivers also slid, as clients became more conservative about market demand, it said.

Revenue last month dipped 16.47 percent to NT$696.33 million, from NT$833.64 million in October, company data showed.

In the first 11 months, revenue dropped 5.71 percent year-on-year to NT$9.41 billion, compared with NT$9.98 billion a year earlier, the data showed.

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