Wistron Corp (緯創), one of Apple Inc’s iPhone assemblers, yesterday said it was upbeat regarding business this year, despite production being halted in India due to the COVID-19 pandemic.
“We are under a big threat of course, regarding the coronavirus outbreak, as we encountered a factory shutdown as well as material shortages from the supply chain [in China] … but we believe this is a short-term issue,” Wistron chairman Simon Lin (林憲銘) told investors at an earnings conference in Taipei.
He forecast a small annual increase in the company’s top line this year, as well as an increase in its profit margin.
The company has a strong foothold in market segments, such as PCs, server storage, smartphones and other smart devices, which are least expected to suffer under the wide-spread pandemic, Lin said.
“Even under a lockdown, we still need [these] tools to stay connected … we will see a quick ramp-up in market demand” after the virus is contained, Lin said, predicting a rebound in sales by the third quarter of this year.
However, sales next quarter are expected to decline, as demand for desktops slips amid an economic slowdown, Lin said.
“We are now shifting our focus from consumer products toward commercial [enterprise] products, as they would be less affected” by market volatility, Lin said, adding that Wistron is prioritizing the production of commercial laptops due to growing demand.
Meanwhile, the company’s server business segment continues to bring in healthy sales as demand from enterprise clients remains robust, Lin said, adding that Wistron is planning to expand its server plant in Mexico within nine months.
Intent on expanding production beyond China, Wistron has nearly doubled capital expenditure from about US$265 million last year to US$550 million this year with another US$450 million to US$500 million planned for next year.
“This will be our biggest spending for 10 years to come,” Lin said, adding “[sales from] outside of China will contribute from 20 to 25 percent this year to about 50 percent next year,” as he pointed to the company’s Vietnam plant, which would produce PCs and monitors, set to open next year.
Wistron’s board of directors proposed to increase investments in India from US$36 million to US$76 million as it seeks further expansion.
The company’s Indian plants, which make older iPhone models, are shut down until April 14 due to New Delhi’s efforts to contain the spread of COVID-19.
Hon Hai Precision Industry Co (鴻海), which also manufactures iPhones in India, has similarly shut down operations in the country for the next three weeks.
Wistron on Tuesday posted a 38.56 percent surge in net profit to NT$6.8 billion (US$224.24 million) for last year, translating into earnings per share of NT$2.4.
Its board has proposed distributing a cash dividend of NT$2 per common share, for a payout ratio of 83.33 percent.
Wistron yesterday launched a share buyback plan to buy up to 60 million shares until May 24.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in