Inventec has reserved outlook on solar energy segment

‘SIGNIFICANT PRESSURE’::Inventec Solar Energy Corp chief executive officer Harry Hsieh says that the company’s profit margin is challenged by US tariffs and competition from China

By Ted Chen  /  Staff reporter

Sat, Nov 11, 2017 - Page 12

Contract electronics manufacturer Inventec Corp (英業達) yesterday gave a reserved outlook for its solar energy business this quarter and next year due to heightened competition and looming tariff hikes.

The company is not optimistic about the outcome of an upcoming Section 201 ruling by the US International Trade Commission that is due in the first quarter of next year, Inventec Solar Energy Corp (英穩達) chief executive officer Harry Hsieh (謝瑞海) told an investors’ conference in Taipei.

“The US solar tariff of 4 percent has been tolerable, but any higher would add significant pressure on margins,” Hsieh said.

The company’s solar business is also facing other challenges, including heightened competition from Southeast Asian and Chinese rivals, Hsieh said.

Southeast Asian competitors have been expanding their production capacities, while European authorities have agreed to allow imports of Chinese solar products under pricing restrictions and in limited quantities, he said.

Hsieh is hopeful that the government’s ‘green’ energy drive will stimulate solar installations beginning next year, he said, adding that installations are expected to rise in emerging markets.

As only about 10 percent of Taiwan’s production output is installed locally, there is room for growth, he said.

Overall, Inventec Corp’s reported net income in the first 9 months surged 215 percent annually to NT$4.18 billion (US$138.54 million), reaching a new record high for this decade, while cumulative sales during the same period rose 6 percent annually to NT$334.84 billion.

The gain was driven by robust shipments of smartphones, smart devices and home appliances, the company said.

The company reported that its investments in financial instruments and foreign exchange hedging, as well as its disposal of production materials, yielded a non-operating income of NT$156 million in the first nine months, compared with a net non-operating loss of NT$1 billion in the same period last year.

However, Inventec chief operating officer Maurice Wu (巫永財) said that following two consecutive years of strong growth, the company does not expect similar growth momentum to continue next year.

Instead of seeking growth and expansion, the company is to continue to optimize its operations and seek profits through improved capacity utilization and margin contribution, Wu said.

The company plans to ship 18 million PC units and 70 million smartphone units this year, and foresees similar results next year, he said, without further details.

Wu said the PC segment has continued to decline at a pace of 5 percent each year, with server markets seeing a spike in key components prices and supply shortages.

David Ho (何代水), chief executive officer at Inventec Appliance Corp (英華達), the company’s “smart” device subsidiary, said the unit expects sales contribution from wearable devices and audio speaker products to increase.

As audio speakers are analog products — an area in which experienced manufacturers enjoy an advantage — Inventec Appliance’s market share in the segment cannot be easily replaced by competitors, Ho said.