MiTAC International Corp (神達電腦), the world’s biggest aftermarket automotive global positioning system (GPS) device maker, yesterday predicted sustainable demand, but higher costs.
A shortage of electronic components that has plagued the industry in the first quarter has shown no signs of abating, MiTAC president Billy Ho (何繼武) told an investors’ conference.
“Because our costs for parts have gone up, our gross margin has been hit,” Ho said. “We are in talks with our clients to figure out how to reflect this cost in our prices.”
He said that MiTAC’s production has not been affected by the current COVID-19 outbreak and would not be even if Taiwan were to go from the current level 3 restrictions to a level 4 lockdown.
“We have only about 15 percent of our production facilities in Taiwan,” he said. “If necessary, we can adjust our production abroad to cover any shortfalls due to a work stoppage in Taiwan.”
Ho also expressed confidence that MiTAC’s facilities in Taiwan would not be hit by water or electricity shortages.
“We are located inside Hsinchu Science Park (新竹科學園區),” Ho said. “I am confident about our electricity supply, and the water supply for now is adequate.”
MiTAC would come up with mitigating measures if water supply deteriorates, he said.
Hsinchu is on a “red alert,” with water supply restricted to five days a week.
MiTAC’s net profit for the first quarter expanded 34.66 percent year-on-year to NT$676.33 million (US$24.2 million) from NT$502.25 million, its filing with the Taiwan Stock Exchange showed.
Earnings per share rose to NT$0.52 last quarter from NT$0.42 a year earlier.
Gross margin for the first quarter fell to 9.15 percent, from 13.28 percent in the same period last year, because of rising parts costs, the company said.
Revenue increased 31.6 percent annually to NT$15.56 billion in the first four months of the year, company data showed.
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