Air compressor maker Rechi Precision Co Ltd (瑞智精密) yesterday said that it started mass production at its new plant in Taoyuan’s Guanyin District (觀音) last month as it moves production lines back to Taiwan from China to avoid US tariffs.
The new plant with an annual capacity of 2 million compressors is expected to achieve an output of 1 million units later this year, most bound for the US, Rechi president Feng Ming-fa (馮明法) told an investors’ conference in Taipei.
The US market accounted for about 26 percent of Rechi’s sales in the first half of the year, while Europe contributed 27.2 percent, China made up 17.4 percent and Southeast Asia 10.2 percent, company data showed.
The company said it had negotiated with clients to jointly shoulder the new tariffs, but the negative effects still caused its net income to fall 34.87 percent year-on-year to NT$436.87 million (US$13.99 million) in the first six months.
Earnings per share dropped from NT$1.36 to NT$0.87 over the period, it said.
In response to the US-China trade dispute, the company has reduced its product prices by 10 percent since the second half of last year in a bid to boost shipments, but they still decreased 3.8 percent year-on-year from about 10.42 billion to 10.02 billion units in the first six months.
Feng attributed the decline to changes in demand, the lingering trade dispute and a slowdown in China’s real-estate market.
With the negative factors likely to remain for a while, the firm is not optimistic about compressor shipments next year, he said.
The company is pinning its hopes on frequency conversion air-conditioners and clothes dryers driving up demand for compressors, Feng said, forecasting that sales of compressors for air-conditioners would increase from 16 percent of total sales in the first six months to more than 40 percent in the next three years.
Rechi produced about 3 million compressors for clothes dryers last year, with Europe remaining its main market, he said.
Rechi’s cumulative revenue in the first eight months fell 9.66 percent year-on-year to NT$14 billion, data showed.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are