Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects.
US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday.
That would make up about 12 percent of the company’s overall revenue.
Photo: Ann Wang, Reuters
To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in countries subject to lower US “reciprocal” tariffs, leveraging its global manufacturing footprint, Peng said.
The company has added new manufacturing sites in India, Europe and Mexico following the acquisition of BHTC GmbH, a German cockpit operation system supplier, he said.
The company would not consider building a front-end display manufacturing facility in the US, due to expensive labor costs and the lack of a comprehensive display supply chain in the country, he said.
Photo: Chen Mei-ying, Taipei Times
Innolux also said it had no plans to build a manufacturing site in the US.
As a major vehicle and TV display supplier to tier-one customers, Innolux has a bigger US exposure than other display and component suppliers, chief executive officer Jim Hung (洪進揚) told a news conference in Taipei.
The company ships vehicle displays directly to customers in the US and Europe, with direct exposures of up to 8 to 10 percent, and as TV brands are among its tier-one customers, it has to directly ship TV displays to the US, Hung said.
Photo: CNA
Indirect exposures to the US accounted for about 10 to 15 percent, he said.
Like most component suppliers, Innolux also ships its displays to electronic assemblers’ factories in China, Vietnam, Thailand and other regions, he said.
In the face of rising uncertainty, Innolux has activated a stringent supply chain management mechanism as it did during the COVID-19 pandemic, Hung said.
The aim is to ensure an optimal level of component inventory as customers are scrambling to stock up on as many goods as possible at their hubs during the 90-day tariff pause announced last week by US President Donald Trump, he said.
With the lasting tariff challenges and geopolitical risks, Innolux would be more “selective in terms of manufacturing sites and partners,” compared with its strategies during the pandemic, he said.
The company is considering shifting more TV panels to TV makers in Mexico from China, given that Mexico is subject to a significantly lower US import duty than China, he said.
AUO and Innolux reported new rush orders this quarter as customers strive to avoid US tariffs.
Hung said second-quarter revenue would outgrow Innolux’s original forecast, but he expects a weaker revenue performance in the third quarter.
The US’ fickle tariff policy has upended the display industry’s seasonal patterns, Peng said, adding that AUO’s revenue forecast in February is no longer suitable.
At that time, AUO had predicted revenue to grow gradually each quarter, he said.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
‘IMMENSE SWAY’: The top 50 companies, based on market cap, shape everything from technology to consumer trends, advisory firm Visual Capitalist said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the 10th-most valuable company globally this year, market information advisory firm Visual Capitalist said. TSMC sat on a market cap of about US$915 billion as of Monday last week, making it the 10th-most valuable company in the world and No. 1 in Asia, the publisher said in its “50 Most Valuable Companies in the World” list. Visual Capitalist described TSMC as the world’s largest dedicated semiconductor foundry operator that rolls out chips for major tech names such as US consumer electronics brand Apple Inc, and artificial intelligence (AI) chip designers Nvidia Corp and Advanced
RSS