Tue, Jan 07, 2020 page12

• Ample optimistic as demand returns

  SUPPLY CRUNCH: The company, which last year generated most of its revenue from conductive paste, plans to expand its product lineup and diversify its customer portfolio

  • By Lisa Wang / Staff reporter
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  Ample Electronic Technology Co (勤凱科技) said it has a positive revenue outlook for the first half of this year, after sales surged last month on the back of rebounding customer demand.

  Consolidated revenue last month increased 91.65 percent to an all-time high of NT$73.25 million (US$2.43 million) from NT$38.22 million a year earlier, the Kaohsiung-based company, which supplies conductive paste primarily to passive component makers, said yesterday.

  Revenue last year sank 17.39 percent to NT$589.2 million from NT$713.25 million in 2018 due to excess inventory in the supply chain, Ample said.

  The company generated 90 to 95 percent of its revenue from conductive paste used in passive components, it said.

  Factory utilization approached 100 percent last month, thanks to “robust inventory replenishment from customers,” Ample said.

  “Customers had cleared all their excess inventory by the fourth quarter,” company president T.Y. Tseng (曾聰乙) told reporters at a media gathering in Taipei.

  Due to the supply crunch, passive component suppliers are allocating capacity to their customers and have raised prices 5 to 10 percent for the extra supply of multilayer ceramic capacitors and chip resistors, Tseng said.

  However, no drastic price hikes are expected this time, in contrast to previous instances, he said.

  “To satisfy customer demand, our factory will continue operating during the Lunar New Year holiday. We plan to implement second shifts to boost output,” Tseng said. “Our customers have decided to work through the holiday to manufacture as many products as possible.”

  Based on customer feedback, “the passive component industry already bottomed out in the third quarter of last year. [Order] visibility for the first half indicates [that revenue] will grow every quarter to hit a record high,” he said.

  Yageo Corp (國巨) and its subsidiary Chilisin Electronics Corp (奇力新) are Ample’s biggest customers, although they make up less than 50 percent of the company’s annual revenue.

  Ample said it is diversifying its customer portfolio by increasing shipments to Walsin Technology Corp (華新科) and securing new customers in South Korea and Japan.

  Ample said it is also expanding its product lineup.

  It has made progress in supplying silver conductive paste to Walsin and Chinese 5G component manufacturers to make dielectric filters for Huawei Technology Co’s (華為) and ZTE Inc’s (中興) 5G base stations, it said.

  “Ample is benefiting from China’s restrictions on sourcing materials and components from the US,” Tseng said.

  Ample competes with DuPont Co in supplying 5G dielectric filters, it said.

  The company expects shipments for 5G dielectric filters to grow significantly in the second half of this year.

  Ample is planning to build a factory in Wuxi, China, in response to Huawei’s request to supply dielectric filters locally.

  In addition, Ample has expanded its products to conductive paste for solar cells, it said.

  The company expects solar conductive paste to contribute about 10 percent of total revenue this year.

  Separately, Yageo yesterday reported consolidated sales of NT$3.26 billion for last month, down 7.4 percent month-on-month and 28.1 percent year-on-year.

  The company in a regulatory filing attributed the decline to fewer working days, reduced shipment from customers in the US and Europe, and a labor shortage.

  Sales in the fourth quarter reached NT$10 billion, down 3 percent from the previous quarter and 38.4 percent from a year earlier, with whole-year sales decreasing 46.5 percent annually to NT$ 41.29 billion, company data showed.

  Yageo said it is positive about end demand this year, despite challenges posed by the labor shortage and a US-China trade dispute.

  As its order delivery lead time has been extended from 45 days to 90 and the inventory level of finished products continues to decrease, the company would endeavor to increase utilization rate to meet customers’ demand, it said.
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