CviLux Corp (瀚荃), which makes connectors and wiring harnesses for servers and computers, yesterday said it is accelerating capacity expansion in Southeast Asia, following in the step of key customers exiting China amid its trade dispute with the US.
Based in New Taipei City’s Tamsui District (淡水), CviLux started to expand to Southeast Asia five or six years ago, building its first plant in Laos with an eye on its cheap labor costs, a stable political environment and geographical advantages.
The factory mainly produces custom-made cables and wiring harnesses for TVs and connectors.
Photo: Fang Wei-chieh, Taipei Times
This year, the company is expanding to Vietnam, where it is building new capacity at leased facilities in Hanoi to produce connectors for notebook computers and servers, as major Taiwanese notebook computer makers such as Compal Electronics Inc (仁寶) and Quanta Computer Inc (廣達) allocate production there.
“Taiwanese manufacturers decades ago allocated production to China because of cheap labor. Now we are moving to Southeast Asia amid a supply chain shift,” CviLux chief executive officer Lawrence Yang (楊奕康) told reporters at a media event in Taipei.
CviLux is also planning new facilities in Thailand and Malaysia to make connectors and wiring harnesses for vehicles and consumer electronic devices such as earphones, Yang said.
The new factories in Southeast Asia are to start operations in the second quarter of next year, he said.
Those production capacity allocations will reduce CviLux’s dependence on Chinese capacity, he said.
By the end of next year, the company’s Chinese capacity would be about 60 percent of its overall capacity, down from 80 percent now, Yang said.
“We are following the requests of our customers,” Yang said. “They hope we can operate factories in three different areas.”
CviLux aims to increase its revenue by 20 percent next year, picking up from a trough this year, he said.
“Next year will be a better year than this year, as we plan to introduce new products,” he said.
Notebook computers and artificial intelligence (AI) servers would be among the main growth drivers, thanks to falling inventory levels and replacement demand next year, the company said.
Moreover, the EU has mandated that type-C charging ports be used for all mobile devices, stimulating demand for related components, it said.
CviLux said revenue from AI-related products is expected to expand 20 percent year-on-year next year.
The company also expects demand for its components to increase, thanks to major customers’ plans to hike capital spending and rising installations of green energy devices, it said.
CviLux reported that net profit in the first three quarters of this year plummeted 35 percent to NT$203 million (US$6.44 million) from NT$311 million a year earlier, or an earnings per share drop to NT$2.6 from NT$3.97.
Gross margin improved to 33.8 percent from 29.17 percent over the same period, the company said.
Revenue in the first three quarters plunged 24 percent annually to NT$2.98 billion, with servers and networking devices business making up 29 percent of the total and notebook computer business next with a 28 percent share.
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