Passive components maker Yageo Corp (國巨) yesterday said it expects the acquisition of two European sensor companies to add about NT$13 billion (US$403 million) to its revenue next year, helping the company broaden its product offerings to high-end sensors used in automotive and industrial devices.
The sensor market is a new area for Yageo, the company said.
The new acquisitions would also help the company better shield against industrial downturns and economic headwinds, as its premium products are less volatile than standard passive components used in consumer electronics.
Photo: Chang Hui-wen, Taipei Times
“The acquisitions will accelerate Yageo’s expansions into premium markets such as the automotive segment, allowing the company’s operation to better weather downturns,” Yageo chairman Pierre Chen (陳泰銘) told an investors’ conference in Taipei.
High-end products are to account for 80 percent of the company’s total revenue following the transactions, compared with 75 percent currently, Chen said.
Additionally, Yageo this year could hit its target of boosting automotive-related product revenue to 22 percent, one year earlier than expected, he said.
Chen made the remarks after the company last month unveiled plans to acquire German sensor supplier Heraeus Holding GmbH and France-based Schneider Electric’s Telemecanique sensor business for NT$2.84 billion and NT$12.4 billion respectively.
The firm has a good chance to complete the transactions in the first half of next year, he said.
With higher revenue from premium products, Yageo does not expect to experience the significant drop in gross margin seen by its peers, Chen said, adding that local competitors generated more than 90 percent from standard passive components, and saw gross margin dip to just above 10 percent from 30 percent.
“Companies with high exposure to standard products are going to experience a tough time during the next two years,” he said.
The passive component industry is entering into an inventory-driven downward trend, although excessive inventories in supply chains are expected to level off in the second or third quarter of next year, Chen said.
Yageo has been trying to enter the sensor market since 2015, he added.
The company now has grown into the world’s No. 3 maker of passive components through 20 mergers and acquisitions over the past two decades. Revenue expanded to NT$106.54 billion last year, surging 58 percent from 2020.
Yageo operates 42 factories in 28 countries. About 80 percent of its 45,000 employees are based abroad.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS