Compal Electronics Co (仁寶) has reportedly joined Apple Inc’s Apple Watch supply chain and is likely to start shipments in the second half of this year, challenging Quanta Computer Inc’s (廣達) position as the product’s sole assembler, the Chinese-language newspaper Digitimes said yesterday.
Quanta has been the sole assembler of Apple Watch’s first and second-generation series since the US company unveiled its smartwatch in September 2014.
While Quanta has secured 100 percent order allocation for the next-generation Apple Watch, which is expected to be released in the second half of the year, Compal will be sharing the production load for the second-generation series, Digitimes said, citing sources in upstream supply chains.
To prepare for the manufacturing of Apple Watch in the second half, Compal has moved its smart devices manufacturing equipment from its Chinese plants in Nanjing and Kunshan to Chongqing, the report said.
By taking up the smartwatch orders, Compal can better utilize its capacity at the Chongqing plant, which has been affected by declining orders for notebook computers, the report said.
Compal’s investor relations declined to comment on the report.
Quanta said it does not comment on matters related to its client.
Compal is the world’s second-largest contract notebook manufacturer by shipments.
Sales contribution from PCs, including notebooks, accounted for 73 percent of its total revenue of NT$766.81 billion (US$25.1 billion) last year, company data showed.
As notebook shipments dropped 8.39 percent to 36 million units last year from 39.3 million units the previous year, Compal has stepped up its diversification efforts by venturing into Internet-of-Things (IoT) devices, such as smartwatches and other wearables.
“Smartwatches and wearables will be one of the main growth engines for Compal this year,” company president Ray Chen (陳瑞聰) told investors on Tuesday last week.
Compal shipped 5.4 million smart devices last year, including smartwatches, and aims to double shipments to between 10 million and 12 million units this year, he said.
Revenue contribution from non-PC businesses is expected to rise from 27 percent last year to 31 percent this year, he forecast.
Apple sold an estimated 11.9 million Apple Watches last year, accounting for 49 percent of global smartwatch shipments, research company Canalys’ data showed.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
RSS