Yageo Corp (國巨), the world’s third-largest maker of multilayer ceramic capacitors, yesterday said that although order visibility for next quarter is vague, it is stepping up restocking in preparation for demand after the COVID-19 pandemic ends.
The company has forecast double-digit percentage quarterly revenue growth this quarter on recovering customer demand, but is uncertain whether the momentum would extend into the second half of the year.
“Because of the pandemic, we do not have clear visibility for the third quarter,” Yageo chairman Pierre Chen (陳泰銘) told reporters on the sideline of the company’s annual shareholders’ meeting in New Taipei City’s Shenkeng District (深坑).
Photo: Lisa Wang, Taipei Times
“I believe Yageo’s revenue and profit will continue to grow after combining [revenue] from Kemet Corp starting from July,” Chen said.
Kemet, based in Fort Lauderdale, Florida, manufactures passive components.
The company’s revenue is 20 percent less than Yageo’s, but it has a better profit margin, given its rich product portfolio in the automotive and national defense sectors, as well as industrial and medical devices, Yageo said.
As they are niche products, the acquisition of Kemet would help Yageo ride volatility in the consumer electronics industry, Chen said.
Yageo would continue scouting for merger and acquisition opportunities to expand its global sales channels and to enhance its technological capabilities, Chen said.
More than 60 percent of Yageo’s revenue came from consumer electronics, smartphones in particular, he said.
Yageo’s priority is to restock, he said.
“We cannot install capacity until [demand outlook] becomes clear. We have to plan ahead,” Chen said. “We are hoping to increase inventory to healthy levels, which is about 100 to 110 days. We are still far from that.”
The company aims to increase inventory to between 50 and 60 days by the end of this quarter by doubling its capacity utilization to about 60 percent, compared with a trough of 30 percent in February, Yageo said.
Yageo would not relocate production capacity out of China, despite trade difficulties and a technology race between Washington and Beijing, it said.
China remains its manufacturing hub, providing 70 percent of manufacturing capacity, it said.
However, Yageo is building new research and development, and high-end product capacity in Taiwan, it said.
“Taiwan will be Yageo’s manufacturing and R&D center for high-end products,” Chen said.
Yageo plans to invest NT$31.2 billion (US$1.05 billion) to expand production capacity at its plants in Kaohsiung’s Dashe (大社) and Nanzih (楠梓) districts, it said.
Moreover, it is setting up a research and development center, and has started construction of a new plant at the Dafa Industrial Park (大發工業區) in Kaohsiung’s Daliao District (大發), which would create about 1,900 jobs, the company said.
MARKET GAP: If China stops buying chips from US firm Micron, they might turn to competitors such as Nanya and South Korean suppliers, researchers said Nanya Technology Corp (南亞科技) shares rallied nearly 4 percent during early trading yesterday amid optimism that the nation’s biggest DRAM chipmaker would benefit from China’s latest ban on purchasing memory chips from Micron Technology Inc. The restrictions are widely considered a result of an escalating technology dispute between the US and China. Chinese firms might shift orders to non-US suppliers such as Nanya Technology and South Korean memory chipmakers Samsung Electronics Co and SK Hynix Inc. The Cyberspace Administration of China on Sunday night said that its review found that Micron’s memory chips pose serious network security risks to the country’s critical
SECURITY RISK: Chinese companies could respond to the announcement by moving away from all products made by the US firm, diverting business toward Korean rivals China delivered the latest salvo in an escalating semiconductor war with the US, announcing that Micron Technology Inc products have failed to pass a cybersecurity review in the country. Operators of key infrastructure in China should not buy the company’s goods, the Cyberspace Administration of China (CAC) said in a statement on Sunday, adding that it found “relatively serious” cybersecurity risks in Micron products sold in China. The components caused “significant security risks to our critical information infrastructure supply chain,” which would affect national security, it said. The results come more than a month after China announced an investigation on imports from
STATE SUBSIDIES: The talks over a factory in Dresden have a top end on par with what Japan is offering TSMC and outdo a cap other firms are being offered in Europe Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is in talks to receive German government subsidies for as much as 50 percent of the costs to build a new semiconductor fab in the country, people familiar with the matter said. The government is in ongoing negotiations with TSMC, as well as its partners on the project — Bosch Ltd, NXP Semiconductors NV and Infineon Technologies AG — the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the final subsidy amount could still change. Any state aid must also
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) senior vice president of business development Kevin Zhang (張曉強) told reporters yesterday that talks over a possible plant in Germany are continuing and that the earliest decision would be in August. “I don’t want to get into the politics side of the thing, but I do think that there is a need for us to provide our customers with a diverse supply,” Zhang said, adding that Europe is a “very significant geography given the customer base ... [and] the demand.” Zhang did not confirm the size of subsidy or cost of the potential project or