Taiwan PCB Techvest Co (志超) last week said China’s clampdown on toxic emissions would significantly increase its spending on manufacturing equipment and waste-management costs, as well as raise challenges for the firm’s operations in the second half of the year.
The printed circuit board (PCB) maker’s remarks came after Top Faith PCB (Shenzhen) Co (達信電路板) last week announced that it was suspending production, as it could not meet the Chinese government’s emissions requirements.
Top Faith plans to close all of its factories by the end of next month, Chinese-language online news outlet Cnyes.com reported on Wednesday last week.
To cope with tightening environmental protection rules and rising emissions standards, Taiwan PCB Techvest has announced increased spending on recycling and waste-processing equipment through facility upgrades in the coming years, company vice president Rita Hu (胡秀杏) told investors on Thursday last week.
Drastic increases in such spending would pose a challenge for most PCB manufacturers, including Taiwan PCB Techvest, Hu said.
She did not provide detailed figures of the company’s expenses.
The company reported NT$321.13 million (US$10.43 million) in net profit for the first half of the year, up 5.31 percent year-on-year from NT$304.95 million, with earnings per share rising from NT$1.24 to NT$1.31 over the period.
First-half sales rose 4.09 percent annually to NT$11.1 billion from NT$10.66 billion, with gross margin and operating margin falling to 11.85 percent and 4.14 percent respectively from a year earlier, company data showed.
Taiwan PCB Techvest operates five factories in Jiangyin, Suzhou and Wuxi in China’s Jiangsu Province, Zhongshan in Guangdong Province and Suining in Sichuan Province, according to the firm’s Web site.
The company generated about 40 percent of its revenue from products used in LCD panels and 29 percent from those in notebook computers.
The company said China would be a major growth driver, as panelmakers there are rapidly expanding to advanced 10th-generation fabs to expand capacities.
Techvest counts BOE Technology Group (京東方) and China Electronics Panda Crystal Technology Corp (中電熊貓) among its major Chinese customers.
China’s anti-pollution campaign might provide a boon to PCB manufacturers with large-scale capacities, as they might see order transfers from smaller PCB makers unable to afford waste-processing facilities that meet government standards, Hu said.
Taiwanese PCB makers, such as Zhen Ding Technology Holding Ltd (臻鼎), Compeq Manufacturing Co (華通), Unitech Printed Circuit Board Corp (燿華), Unimicron Technology Corp (欣興) and Tripod Technology Corp (健鼎), are expected to be catalyzed by the order-transfer effects due to their advantages in quality, technology and more environmentally friendly production lines, the Chinese-language Economic Daily News reported.
As China’s environment policies accelerate capacity elimination, PCB makers have negotiated with customers over potential price hikes, the report said.
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