Four major Formosa Plastics Group (FPG, 台塑集團) units’ revenues for last month fell from a year earlier, with Formosa Chemicals & Fibre Corp (台灣化纖) reporting the largest decline following an industrial incident early last month.
Formosa Chemicals, which manufactures and sells integrated plastic and nylon products, saw revenue drop 12.6 percent annually to NT$28.94 billion (US$934.8 million), a 9.8 percent monthly decline.
“The accident at our No. 3 aromatics plant, and the periodic inspections on our phenol synthesis plant, No. 1 aromatics plant and No. 3 styrene monomer plant lowered our output and resulted in a decline in revenue last month,” Formosa Chemicals vice chairman Hong Fu-yuan (洪福源) said last week.
Prices of plastic materials, such as acrylonitrile butadiene styrene, purified terephthalic acid, and p-xylene, remain high this quarter, while other products have lower prices than a year earlier, Hong said.
He said that as the No. 1 and No. 3 aromatics plants, as well as the No. 3 styrene monomer plant, would remain closed this month, revenue would continue falling.
“We expect revenue for this quarter to be lower than last quarter,” Hong said.
The No. 3 aromatics plant in Yunlin County’s Mailiao Township (麥寮) has been shut since an explosion on April 7. It is expected to partly restart operations early next month and hopes to reach 50 percent of regular p-xylene and 60 percent of benzene production, the company said.
It is expected to be fully operational by August after passing safety inspections, the company added.
Formosa Petrochemical Co (台塑石化), the group’s oil refining subsidiary, reported a 11.2 percent annual decline in revenue, down 4.2 percent monthly to NT$52.53 billion.
The company’s refinery and olefins businesses also suffered last month, and shipments of refined petroleum products decreased to 13,812 barrels, from 14,425 barrels in March.
Formosa Petrochemical president Tsao Minh (曹明) attributed the drop in refinery sales to falling product prices and shipment delays, while the below-average selling prices of olefin products and regular inspections of its downstream clients’ factories resulted in the decrease in revenue of its olefins business, he added.
“Our capacity utilization rate is expected to reach 94 percent this quarter, compared with 88 percent last quarter,” Tsao said, adding that he expects the company to post a steady profit this quarter.
Formosa Plastics Corp (FPC, 台塑), which makes intermediate raw materials for plastics such as polyvinyl chloride (PVC) and vinyl chloride, saw revenue dip 1.8 percent annually, but increase 2.7 percent monthly to NT$19.29 billion.
FPC president and chairman Jason Lin (林健男) said the monthly increase reflected higher sales of PVC products and lower sales in March, when the company conducted annual maintenance of its acrylonitrile (AN) and methyl methacrylate plants.
Prices of AN and PVC are expected to rise this quarter due to a supply shortage and rising costs, respectively, and growing demand for these products as well as a higher utilization rate are to boost this quarter’s revenue, he said.
The utilization rate is estimated to reach 95 percent this quarter, from 90 percent last quarter, he said.
As for Nan Ya Plastics Corp (南亞塑膠), which makes plastics products, chemicals, electronic materials, revenue dropped 10.1 percent annually, but rose 0.4 percent monthly to NT$25.07 billion.
Nan Ya chairman Wu Chia-chau (吳嘉昭) said electronic materials were the main revenue source last month, while sales of epoxy resins and printed circuit boards also increased.
However, sales of ethylene glycol, used in the manufacture of polyester fibers and antifreeze items, plunged NT$1.48 billion annually and NT$900 million monthly, as its price has remained low since January and demand has been sluggish, the company said.
Wu said the company’s revenue for this month would remain the same or increase slightly from last month, while revenue for this quarter is forecast to be higher than last quarter as the industry enters its peak season with more working days than last quarter.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks