The New Taiwan dollar’s continued appreciation against the US dollar would drag on printed circuit board (PCB) manufacturers’ earnings this quarter, analysts said, adding that high costs for raw materials and shipping driven by restocking demand would also affect their business.
However, PCB makers’ gross margins would be less strongly affected, as many firms in the sector plan to raise prices to reflect cost pressure, Yuanta Securities Investment Consulting Co (元大投顧) said in a note last week.
“We estimate that if the NT dollar’s appreciation rises by one dollar against the greenback, PCB makers’ core earnings would drop 10 percent, while a 10 percent copper price hike would reduce their earnings by 5 percent,” Yuanta analysts led by Liu Szu-liang (劉思良) said in the note.
Photo: Krisztian Bocsi, Bloomberg
Raw materials, including copper, adhesive solutions and gold, account for 40 to 45 percent of PCB makers’ production costs, with copper alone making up 15 to 20 percent, they said.
In terms of orders, Yuanta analysts said that the outlook remains positive for companies making Ajinomoto build-up film substrates and automotive PCBs, as well as those supplying PCBs for laptops, tablets, servers and gaming devices.
That includes Chin-Poon Industrial Co (敬鵬工業), Dynamic Electronics Co (定穎電子), Apex International Co (泰鼎國際) and Tripod Technology Corp (健鼎科技) in the field of automotive PCB business, Gold Circuit Electronics Ltd (金像電子) and Elite Material Co (台光電子材料) in the server PCB segment, they said.
Compeq Manufacturing Co (華通電腦), Unitech Printed Circuit Board Corp (燿華電子), Nan Ya Printed Circuit Board Corp (南亞電路板) and Kinsus Interconnect Technology Corp (景碩科技), which make PCBs or IC substrates for true wireless stereo earphones, would also be affected, they added.
“The ABF substrates and automotive PCB capacity is fully booked, while orders for laptop, tablet, server and gaming PCB are at high levels,” the analysts said.
“Bismaleimide-triazine resin substrates and Chinese handset PCBs have also seen strong orders leading up to the Lunar New Year holiday, with handset sales during the holiday to determine the volume of post-holiday orders,” they said.
Last month, 39 listed PCB makers reported that their combined revenue grew 23.97 percent year-on-year to NT$68.99 billion (US$2.43 billion), data released on Jan. 12 by the Taiwan Printed Circuit Association (台灣電路板協會) showed.
Makers of substrates and rigid PCBs saw their combined revenue increase 9.91 percent to NT$43.696 billion, and revenue of those making flexible PCBs totaled NT$25.297 billion, up 59.15 percent, the data showed.
For all of last year, listed PCB makers’ revenue grew 5.62 percent from 2019 to NT$667.22 billion, with Nan Ya, Kinsus Interconnect, Best Friend Technology Co (友銓電子), Gold Circuit and Allied Circuit Co (博智電子) reporting more than 20 percent growth in revenue on the back of solid demand for IC substrates and server PCBs, the association said.
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