Shares of Gold Circuit Electronics Ltd (金像電子), one of the nation’s leading manufacturers of printed circuit boards (PCBs) for notebook computers, took a beating on the Taiwan Stock Exchange yesterday after a fire broke out at its plant in Changshu, China, on Thursday.
Investors rushed to dump their Gold Circuit shares amid fears that the disruption of production at the Changshu plant resulting from fire damage would affect the company’s profitability, dealers said.
Gold Circuit shares closed 7 percent down at NT$6.53 yesterday, compared with a decline of 1.52 percent on the TAIEX.
PRODUCTION STOPS
According to Gold Circuit, production at the plant is likely to be suspended for several months and it was not clear when operations would resume.
The company said its production lines in Jhongli (中壢) and in Suzhou, China, would make up the shortage resulting from the disruption. However, the accident may result in a sales drop of about 15 percent, it added.
“The production suspension has created uncertainty over the company’s operations,” Horizon Securities (宏遠證券) analyst Benson Huang (黃重善) said. “That’s why the stock encountered a sell-off right after the market opened.”
Huang said Gold Circuit’s PCBs for notebook computers have an estimated gross margin of just 5 to 6 percent due to weakening global demand for notebooks.
“Such a gross margin is not at all impressive,” Huang said. “The production suspension is likely to make the situation even worse.”
Gold Circuit ranks as the world’s second-largest notebook computer PCB maker, with a 20 percent market share, after Hannstar Board Corp (瀚宇博德), which has a 43.5 percent share.
COMPETITORS GAIN
“To my knowledge, many buyers have shifted their orders from Gold Circuit to HannStar and other PCB makers, like Tripod Technology Corp (健鼎科技), since the fire,” Huang said. “I do not expect any significant impact on the global notebook computer supply chain.”
“Gold Circuit’s competitors have become the biggest beneficiaries of the fire,” he said.
HannStar Board shares climbed 3.10 percent to NT$16.65 and Tripod Technology shares rose 0.74 percent to NT$95.10 yesterday.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS