Yageo Corp (國巨) on Wednesday issued a positive forecast for business and gross margin prospects as merger-and-acquisition deals bear fruit.
Chairman Pierre Chen (陳泰銘) and CEO David Wang (王淡如) told a virtual investors’ conference that the world’s third-largest supplier of multilayer ceramic capacitors (MLCCs) continued to see strong customer booking this year and expected demand to remain robust in the next one to two years, while it expands capacity worldwide, mainly for specialty products, according to documents obtained by the Taipei Times.
Kemet Corp, which Yageo acquired last year and specializes in MLCCs and other passive components for vehicles, plans to boost capacity at its Mexican factory, which is running at full capacity, Yageo said.
Photo: Tu Chien-jung, Taipei Times
The plant generated more than 90 percent of its revenue from passive automotive components, it said.
Yageo also plans to expand capacity at plants in Kaohsiung and Suzhou, China, it said.
Passive automotive components and those used in industrial devices, medical equipment and data centers are considered specialty products, which deliver higher gross margins due to higher prices and longer supply contracts, the company said.
With the acquisition of Kemet and Pulse Electronics Corp last year, Yageo expects specialty products to make up 82 percent of revenue in 2023, compared with 75 percent this year, while commodity products would make up the rest.
Other passive components, which are used mostly for computers, consumer electronics and communication devices, are vulnerable to price volatility and could adversely affect gross margin, Yageo said.
Due to improvements in its product mix, Yageo expects gross margin to rise further, after climbing to 39.1 percent last quarter from 38 percent in the previous quarter, the company said.
Regarding a strategic alliance with Hon Hai Precision Industry Co (鴻海精密), Yageo said it would secure a bigger order allocation of 50 percent from Hon Hai, compared with 25 percent previously.
The firms last month agreed to form a joint venture, XSemi Corp (國瀚半導體), to focus on chips used in electric vehicles and electronic devices.
Yageo shares rose 2.64 percent to NT$545 yesterday, the highest since April 29.
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