Taiwanese bicycle manufacturers reported robust revenue growth of 40 to 80 percent in the first two months of this year, with some hitting record highs for January and February, the companies’ data showed last week.
Solid growth momentum and strong orders amid the COVID-19 pandemic-driven bicycle boom would boost the industry’s revenue this quarter, analysts said.
Giant Manufacturing Co (巨大機械), Taiwan’s largest bicycle manufacturer, posted combined revenue of NT$12.19 billion (US$432.5 million) for January and last month, up 40.08 percent from the same period last year, which the company attributed to strong global demand for bicycles amid the pandemic.
Merida Industry Co (美利達), posted cumulative revenue of NT$4.83 billion in the first two months, up 43.74 percent year-on-year, the highest for the period in the company’s history.
Merida, which also sells bicycles under the Specialized Bicycle Components brand, shipped 183,078 bicycles in the two-month period, up 50.05 percent from a year earlier, Merida said in a statement.
Cumulative revenue at Lee Chi Enterprises Co (利奇機械), which produces bicycle components under the Promax brand, surged 81.13 percent to NT$604.02 million in the same period, the company said.
Bicycle chain maker KMC Kuei Meng International Inc (桂盟國際) reported revenue growth of 71.21 percent to NT$1.11 billion, while Topkey Corp (拓凱實業), which produces carbon fiber bicycle parts, reported revenue growth of 52.66 percent to NT$1.29 billion.
Revenue surged due to lifestyle trends amid the pandemic, which raised many people’s awareness of health and physical fitness, analysts said.
Global bicycle demand would remain robust this year, due to governments worldwide promoting cycling and subsidizing bicycle purchases, they said.
“Over the past 25 years, bicycle sales have seen steady annual growth at a single-digit percentage every year,” Yuanta Securities Investment Consulting Co (元大投顧) analysts led by Peggy Shih (施姵帆) said in a note on March 5. “However, amid the COVID-19 pandemic, global bicycle sales volume increased 32 percent year-on-year in 2020.”
Global bicycle orders have doubled or even tripled, and the production lead time is now one to two years, compared with about 60 days before the pandemic, Shih said.
Inventory levels are to drop to record lows amid strong market demand, while strong end-demand has intensified components shortages in the short term, she said.
Delivery times for some bicycle parts have increased to about 300 days, Shih said.
Larger manufacturers such as Giant and Merida have advantages in terms of material and component purchases, and greater bargaining power for finished products, Shih said, projecting that the two firms’ shipments would increase 10 percent and 15 percent respectively this year.
Despite tighter supply, order visibility for KMC’s high-end bicycle chains has extended to the end of this year, she added.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan