Inventec Corp (英業達) yesterday said it plans to cope with the intensifying US-China trade war by shifting its labor-intensive module assembling business to factories in Taiwan, Malaysia or Mexico to avoid US tariffs on Chinese imports.
The trade war is the biggest risk facing the electronics industry this year, undermining capacity expansion plans in Shanghai and other cities in China, Inventec said.
“The company expects 10 percent of its revenue to be be affected by the US$250 billion tariff list,” Inventec Appliance Corp (IAC, 英華達) chief executive officer David Ho (何代水) told an investors’ teleconference.
IAC, a smart device manufacturing arm of Inventec, supplies AirPod earbuds for Apple Inc.
If Apple products were not exempted from US tariffs, the impact “would have been as high as 90 percent,” Ho said.
“We are comfortable [about the tariffs’ effects]. However, we are more concerned about the next round of US tariffs, which could include almost all goods” made in China, Ho said. “We want to do everything we can to help reduce costs for our clients.”
The US has announced 10 percent tariffs on US$250 billion of Chinese products and US President Donald Trump has said the tariffs would be increased to 25 percent on Jan. 1.
To avoid the planned tariff hike, IAC is preparing for capacity expansions in its factories in Taiwan and Malaysia that assemble mobile and smart devices for the US market, he said.
IAC is also considering assembling notebook computer and server modules at its Mexico plant, he said.
Due to growing uncertainty about trade tensions and a continuing shortage of Intel Corp microprocessors, Inventec is cautious about the outlook for the current quarter and next year, Inventec president Maurice Wu (巫永財) said.
“We began to see the early effects of the trade war in the third and fourth quarters,” Wu said.
Revenue this quarter will likely retreat from a record NT$141.07 billion (US$4.57 billion) last quarter, and gross margin is also trending down, the company said.
Gross margin dropped to a multiyear low of 4.7 percent last quarter from 5.5 percent a year earlier and 5 percent a quarter earlier.
Net profit last quarter plunged 32 percent annually to NT$1.58 billion from NT$2.33 billion, due mainly to a huge foreign-exchange loss of NT$503 million as the Chinese yuan fell 4 percent against the US dollar in the quarter.
On a quarterly basis, net profit contracted by 30 percent from NT$2.24 billion.
Notebook computers constituted the biggest portion of the company’s revenue last quarter with 45 percent share, the company said.
Servers accounted for 36 percent, while smart devices made up 18 percent.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS