Trusval Technology Co (信紘科) yesterday gave an optimistic outlook for next year, as it seeks a stronger presence and growth momentum in China.
Trusval specializes in the design and manufacturing of supply systems for companies such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電).
“The Chinese market is developing very fast... We are seeing increasing demand for our equipment from Chinese customers, especially since the [Chinese government imposed] restrictions on US imports,” Trusval associate finance officer Jessie Wang (王怡文) told reporters at a company briefing in Taipei.
The international trade group SEMI said in a recent report that China’s semiconductor equipment investment is expected to see a compound annual growth rate of 48.2 percent from last year to next year.
Wang said that 5 to 10 percent of Trusval’s revenue comes from China, with the company providing system equipment for chemical supply, slurry supply and gas supply.
The company reported revenue of NT$350 million (US$11.39 million) for last quarter, up 34.84 percent year-on-year.
Cumulative revenue in the first nine months of this year surged 29.53 percent to NT$920 million, thanks to increased orders from large fabs that are expanding capacity.
First-half net profit was NT$5.84 million, or earnings per share of NT$0.17.
However, gross margin sank to 11.62 percent in the first half from 24.39 percent a year earlier.
“Our projects on facility capacity expansion only yielded gross margins of 8 to 12 percent,” Wang said, adding that plant constructions tend to generate higher gross margins as commissioning companies provide more budget leeway due to potential on-site errors.
Furthermore, the company recently developed a treatment system to process waste solvent and wastewater as part of its solutions for sustainable production procedures, which also generated a low profit margin due to the high cost of investment in research and development, Wang added.
Trusval’s sustainable solutions business contributed 2.7 percent to its overall revenue in the first half, down from 14.9 percent last year, which the company blamed on the US-China trade row.
As more companies adopt environmental friendly solutions, Trusval is expected to ramp up its economies of scale and increase its gross margin within the next three to five years, Wang said.
“We are currently in negotiations with potential customers [in China] over our treatment of waste solvent and wastewater systems,” she said, adding that the company mainly deals with state-run enterprises.
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