Companies in the bicycle industry are expected to benefit from record-low inventory at distributors, new lifestyle trends and continued growth momentum in the electric bicycle sector during the post-COVID-19 pandemic period, analysts said.
Taiwan’s leading bicycle maker Giant Manufacturing Co Ltd (巨大機械) and bicycle chain maker KMC Kuei Meng International Inc (桂盟國際) would gain most from the rising demand for mid to low-end bicycles and strong sales growth of high-margin electric bicycles, Yuanta analysts led by Peggy Shih (施姵帆) said in a research note on Tuesday.
“Bicycles satisfy social distancing requirements and provide a safe way to commute and exercise amid the pandemic. This has helped the growth in overall bike demand,” they said.
Photo: Ritchie B. Tongo, EPA-EFE
Consumers’ increased demand for bicycles has led to healthy sales and supply shortages for mid and low-end models globally, the Yuanta analysts said.
It has also resulted in extremely low inventory at distributors, while boosting the capacity utilization rate for bike component suppliers, they added.
Yuanta analysts forecast that global bicycle demand would reach 110 million units this year, with high-end models comprising about 12 million of the total, including 2 million to 2.5 million high-end electric bikes.
Demand for mid to low-end models for commuting and leisure activities is likely to increase by 5 million to 10 million units this year, they said.
Meanwhile, demand for electric bicycles is expected to grow by a compound annual growth rate of 10 to 11 percent in the four years from last year, with annual sales in the EU and the US likely to increase to between 4 million and 4.1 million units in 2022, compared with 3 million units last year, the analysts said, citing bicycle suppliers’ estimates.
Giant, the world’s largest bicycle maker with 70 percent of capacity allocated to its own brands, reported revenue of NT$6.01 billion (US$211 million) for last month, up 12.01 percent year-on-year, while cumulative revenue in the first 11 months increased 9.65 percent annually to NT$64.25 billion, exceeding last year’s full-year revenue of NT$63.41 billion, company data showed.
“Giant can respond to market demand rapidly and adjust component purchases in a timely manner, therefore it suffered less impact from component shortages versus [its] peers,” the Yuanta analysts said.
The company has also seen its e-bike sales volume grow 20 to 30 percent year-on-year in the US and EU markets this year, the analysts said, adding that Giant’s e-bike market share is expected to rise in the US and EU next year from 7 percent this year, further supporting its gross margin growth.
KMC, the world’s leading chain supplier with a global market share of 80 percent, reported that its revenue last month grew 45.07 percent year-on-year to NT$631 million, the second-highest on record.
Its cumulative revenue in the first 11 months rose 15.38 percent to NT$5.47 billion, exceeding last year’s full-year figure, company data showed.
As “KMC plants are running at full capacity on the back of strong bicycle sales globally,” and given “bicycle chain migration driven by the e-bike trend, and rising demand for high-margin aftermarket bike products, we expect it to see gross margin expansion going forward,” the Yuanta analysts said.
Another major bicycle maker, Merida Industry Co Ltd (美利達), reported that its revenue last month rose 12.85 percent year-on-year to NT$2.28 billion, while cumulative revenue in the first 11 months decreased 3.69 percent to NT$24.67 billion.
The leading mid to high-end bicycle manufacturer distributes its products under the Specialized Bicycles Components Inc brand and its own brand.
As the Specialized brand’s high-end models account for 70 to 80 percent of Merida’s brand business, Merida would see less benefit from rising demand for mid to low-end models, the analysts said.
Merida bought a minority stake in Specialized, the fourth-largest bicycle maker in the US, in 2001.
With this year’s Semicon Taiwan trade show set to kick off on Wednesday, market attention has turned to the mass production of advanced packaging technologies and capacity expansion in Taiwan and the US. With traditional scaling reaching physical limits, heterogeneous integration and packaging technologies have emerged as key solutions. Surging demand for artificial intelligence (AI), high-performance computing (HPC) and high-bandwidth memory (HBM) chips has put technologies such as chip-on-wafer-on-substrate (CoWoS), integrated fan-out (InFO), system on integrated chips (SoIC), 3D IC and fan-out panel-level packaging (FOPLP) at the center of semiconductor innovation, making them a major focus at this year’s trade show, according
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
DEBUT: The trade show is to feature 17 national pavilions, a new high for the event, including from Canada, Costa Rica, Lithuania, Sweden and Vietnam for the first time The Semicon Taiwan trade show, which opens on Wednesday, is expected to see a new high in the number of exhibitors and visitors from around the world, said its organizer, SEMI, which has described the annual event as the “Olympics of the semiconductor industry.” SEMI, which represents companies in the electronics manufacturing and design supply chain, and touts the annual exhibition as the most influential semiconductor trade show in the world, said more than 1,200 enterprises from 56 countries are to showcase their innovations across more than 4,100 booths, and that the event could attract 100,000 visitors. This year’s event features 17
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
RSS