Pegatron Corp’s (和碩) board of directors has approved a proposal to spend US$150 million to build manufacturing facilities in India, while considering a plant in the US, the company said yesterday.
A factory in India is to begin production in the second half of next year or in 2022, it said.
“This is just the initial investment,” CEO Liao Syh-jang (廖賜政) said. “Due to the COVID-19 situation, it has been harder for Pegatron staff to visit India, resulting in delays.”
Speaking to a virtual investors’ conference, Liao said there is “client demand” for US production as well, and that the possibility is “under investigation.”
“Our clients would like a local production facility in the US,” he said, “we are not ruling it out.”
Pegatron has 11 production facilities worldwide.
“It takes up to a month for goods to arrive in the US from Asia, for example,” he said. “If we had a facility in the US we would be able to provide more timely delivery.”
Pegatron is also going to expand its operations in Vietnam, he said.
Liao said the company would enhance internal labor investigations, after Apple Inc on Monday announced that it had discovered labor violations involving student workers at Pegatron factories in China and that it would freeze new business with the firm until the situation is addressed.
“We have done a lot of internal investigations since this came out. We will not let something like this happen again,” Liao said.
Pegatron also said that third-quarter net profit fell 3.6 percent to NT$6.82 billion (US$236.31 million) from NT$7.07 billion in the second quarter, representing annual growth of 8.3 percent from NT$6.3 billion.
Earnings per share fell to NT$2.61 last quarter from NT$2.71 in the second quarter and NT$2.41 a year earlier.
However, revenue expanded 2.38 percent quarter-on-quarter to NT$335.6 billion from NT$327.84 billion, but declined 5.4 percent annually from NT$354.8 billion.
Gross margin fell to 4.2 percent last quarter from 4.4 percent in the prior quarter, but was an improvement compared with 3.8 percent in the third quarter last year, it said.
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