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.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an