Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, has allocated more than US$400 million in capital expenditure this year to expand its production capacity and meet rising demand for products across the board, company executives said yesterday.
That would mark the second straight year that its capital expenditure has reached US$400 million.
“Our investments last year and this year clearly reflect management’s optimism in Pegatron’s business outlook and global economy,” chairman Tung Tzu-hsien (童子賢) told a news conference ahead of the company’s annual banquet for employees at the Nangang Exhibition Hall.
Pegatron chief executive officer S.J. Liao (廖賜政) said despite the smartphone industry’s growth momentum having slowed, Pegatron would not necessarily be affected, as the average selling price of smartphones is increasing.
“We are well-positioned in the industry, as our focus is on mid to high-end smartphones,” Liao said.
In addition, Pegatron’s subsidiaries, such as silicon substrate maker Kinsus Interconnect Technology Corp (景碩科技) and contact lens supplier Pegavision Corp (晶碩), are all expected to see further business growth this year.
Pegatron’s metal casing subsidiary, Casetek Holdings Ltd (鎧勝), has made good progress in securing orders for non-notebook products from both new and existing clients this year, Tung said.
Tung declined to confirm reports that Casetek is to join the iPhone supply chain for the first time this year.
Liao said the company plans to spend its capital expenditure mainly on the construction of new factories and the purchase of more equipment at Pegatron’s manufacturing bases in China.
Pegatron’s new Internet of Things, augmented reality, virtual reality and automotive electronics businesses are estimated to see robust growth momentum this year, he said.
However, the company is to closely monitor the supply of key components and materials, as the positive global economy outlook might result in constrained supply, he added.
Pegatron chief financial officer Charles Lin (林秋炭) said labor recruitment in China would still be a risk for Pegatron this year, as less young adults in the nation are willing to work in factories.
Pegatron’s revenue grew 3.1 percent to NT$1.19 trillion (US$40.7 billion) last year, the company’s second-highest annual revenue since it earned NT$1.21 trillion in 2015, company data showed.
The company’s shares closed at NT$77.6 on Friday, rising only 1.97 percent over the past year, Taiwan Stock Exchange data showed.
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