Casetek Holding Ltd (鎧勝), Pegatron Corp’s (和碩) metal casings subsidiary, is expected to enter the supply chain for Apple Inc’s iPhones next year, after years of preparation, a source said yesterday.
“Pegatron’s strong capability to assemble ‘thousands’ of components and integrate systems will help Casetek to deliver handset casing that combine glass and aluminum alloys,” a person familiar with the matter told a small group of reporters on condition of anonymity.
Casetek supplies metal casings for Apple’s iPads and MacBooks. It has expressed interest in expanding its presence in the Apple supply chain for years.
The source said Casetek’s orders came after the US company’s metal casing suppliers encountered harder-than-expected issues with production this year after Apple changed its casing materials, using glass for the front and back covers with an aluminum alloy to support the frame of the casing.
The dissatisfying yield of casings delayed the shipments of partly assembled iPhones to Pegatron for final assembly, which had a major impact on the iPhone assembler, the source said.
“Pegatron expanded its production capacity and increased its workforce 30 percent for the iPhones this year... The delayed shipments from the casing suppliers really affected the company,” the source said.
Pegatron has announced capital expenditure of between US$400 million and US$450 million for this year, more than double the US$200 million it spent last year.
The firm on Nov. 9 unexpectedly reported a 32.4 percent annual decline in net profit for last quarter to NT$3.63 billion (US$120.96 million), citing component shortages and surging labor costs.
Pegatron chief financial officer Charles Lin (林秋炭) told investors that the disruption to the supply of components caused workers to remain idle when the firm was scheduled to ramp up production of a new communications product.
Due to the unexpected drop in earnings, Pegatron’s net profits in the first three quarters fell 18.7 percent year-on-year to NT$10.95 billion, company data showed.
Hon Hai Precision Industry Co’s (鴻海精密) metal casing arm Foxconn Technology Co (鴻準) also faced a similar challenge, but Hon Hai’s strong electronics manufacturing service gave significant support to Foxconn Technology and improved its yield rate, the source said.
Pegatron chairman Tung Tzu-hsien (童子賢) yesterday declined to confirm the iPhone casing orders, saying that the company does not comment on anything related to a specific product or client.
“It is true that Pegatron’s earnings performance was weaker than our expectation, but that is just one of the risks of doing business in this industry,” Tung said at the opening of the IT Month exhibition at Taipei World Trade Center.
Pegatron believes that the weak performance this year is only a temporary setback and the management team still has positive outlook for next year, Tung said.
“We do not see any factors that would make us have a pessimistic outlook for next year,” he said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS