Topco Scientific Co (崇越科技) last week reported strong financial results for the first quarter, despite short-term effects on the semiconductor sector from the lingering trade spat between the US and China and the impact of adjustments in supply chain inventories.
While the escalating trade dispute might lead to lower order visibility in the short term, favorable industry trends are still expected to support the company’s business in the mid-to-long term, analysts said.
In addition, China’s policy of building a domestic semiconductor supply chain remains unchanged, which should benefit the company’s business, the analysts added.
Topco Scientific distributes semiconductor materials, mostly photoresists and silicon wafers from Shin-Etsu Chemical Co and slurry from Fujimi Inc.
Its photoresist business has maintained an annual growth rate of up to 5 percent over the past few years, with 70 percent order allocation in Taiwan Semiconductor Manufacturing Co’s (台積電) advanced processes.
Semiconductor-related business account for nearly 80 percent of its total revenue, but Topco Scientific has also seen stable revenue contributions from the factory and environmental engineering businesses over the period.
The booming engineering sector in Taiwan and China in the first quarter helped lift the company’s gross margin to 12.4 percent from 12.21 percent in the same period last year.
SinoPac Securities Investment Service Corp (永豐投顧) maintained its “buy” rating on Topco Scientific shares, which have advanced 20.55 percent so far this year and closed at NT$83.9 on Friday in Taipei trading.
“In light of Chinese wafer fabs’ new capacity ramp-up, the persistent US-China trade dispute seems to have no negative impact on the company’s engineering business, while it is to benefit from rising demand for semiconductor materials in Southeast Asia as more electronics firms relocate their operations from China,” SinoPac analyst Stanley Wang (王彥鈞) said in a client note on Friday.
As demand for silicon wafers and photoresists is to remain strong this quarter, due to higher factory utilization among wafer foundries and the expected contribution from major engineering projects in China, the company’s revenue is forecast to increase 5.7 percent to NT$7.5 billion (US$239.6 million) from NT$7.1 billion last quarter, Wang said.
Gross margin might fall to 12 percent as the company’s higher reliance on wafer foundries gives it less bargaining power in pricing, with net profit dropping 7.6 percent quarter-on-quarter to NT$360 million, or earnings per share of NT$1.97, he said.
The company reported that net profit rose 45.59 percent annually to NT$386.57 million in the first quarter — the highest first-quarter figure in its history — with earnings per share of NT$2.13, an earnings presentation document showed on Thursday.
Operating profit increased at a slower pace of 19.87 percent to NT$398.82 million, partly due to research and development expenses, it said.
Losses from AnyongFresh (安永生鮮), the company’s investment in the healthy food and distribution segment, contracted to NT$40 million in the first quarter.
The company said it aims to contain the losses to within NT$200 million this year.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”