Unimicron Technology Corp (欣興電子) yesterday said that its factory utilization rate is expected to climb to more than 85 percent in the second quarter due to recovering production in China and robust demand for IC substrates used in 5G-related applications.
About 80 to 90 percent of its staff in China have returned to work, the Taoyuan-based printed circuit board maker (PCB) said.
Its factory utilization rate plunged to 60 to 75 percent this quarter, as employees in China could not work due to the lockdowns imposed in a bid to contain the spread of COVID-19, it said.
Unimicron said it expects to be adversely affected by the outbreak in the first quarter, as China is its manufacturing hub, contributing up to 35 percent of its total output.
Most of its traditional PCBs, all of its flexible PCBs and 30 percent of its high-density interconnect (HDI) PCBs are produced in China, it said.
It said it expects capacity utilization for IC substrates to remain full through the second quarter, supported primarily by strong demand from the 5G-enabled artificial intelligence, Internet of Things, data center and networking equipment sectors.
“The equipment loading rate for IC substrate capacity will remain at a high level based on customer orders and demand projections,” Unimicron spokesman Michael Shen (沈再生) said.
“Some customers have even placed orders for third-quarter [delivery]. The coronavirus has not affected demand for IC substrates yet,” Shen said.
Unimicron has raised its capital expenditure this year to NT$24.07 billion (US$795.7 million) from NT$11 billion last year.
Most of the funds would be invested in expanding capacity at its plant in Taoyuan’s Yangmei District (楊梅) by 10 to 15 percent for advanced IC substrates used in central processing units and graphics processing units, it said.
The expansion would be used for a single customer’s projects and would not be affected by the pandemic, it said.
The new capacity is expected to be fully utilized by the second half of 2024, it added.
Last quarter, IC substrates were its largest revenue source, contributing about 42 percent to total revenue of NT$22.57 billion, while HDI PCBs — which are suitable for premium smartphones and 5G applications — accounted for 40 percent of revenue, Unimicron said.
Net profit soared 90.64 percent last year to NT$3.26 billion, up from NT$1.71 billion in 2018 — the most in seven years — while earnings per share jumped to NT$2.24 from NT$1.15.
Gross margin last year improved to 13.7 percent from 11.1 percent a year earlier.
The company’s board of directors has approved a proposal to distribute a cash dividend of NT$1.1 per share, representing a payout ratio of 49.1 percent.
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