Embedded computer module and industrial motherboard maker Advantech Co (研華) on Wednesday said it would postpone plans to raise product prices for shipments to the US to help customers cope with the uncertainty surrounding US tariff policies.
Advantech had planned to hike prices on US-bound products after US President Donald Trump proposed a 32 percent “reciprocal” tariff on Taiwanese goods, but the plan has been postponed following a 90-day tariff pause, Advantech chief financial officer Eric Chen (陳清熙) told an earnings conference in Taipei.
About 93 percent of the company’s shipments to the US come from Taiwan, 6 percent from China and 1 percent from Europe, and the company is discussing with major customers ways to ease the tariff impact, including shipping products directly to them without going through US customs, Chen said.
Photo: Fang Wei-chieh, Taipei Times
Advantech operates assembly plants in the US, focusing on high-value peripherals, such as central processing units (CPUs), hard drives and memory products, which are assembled locally and shipped directly to customers to mitigate the impact from tariffs, Chen said.
About 40 percent of Advantech’s US customers bear the tariffs themselves, while the company initially covers the remaining 60 percent and passes the costs on to customers later, depending on the terms of the transaction, he said.
So far, none of the company’s North American customers has asked it to shoulder the tariff costs, as the levies are imposed by the US government, Chen said.
However, the company would absorb part of the costs, while customers would bear the majority, he added.
The company remains positive about its revenue outlook for the second quarter, with no significant cases of customers front-loading or shifting orders so far, Chen said.
However, if the US still imposes high tariffs on Taiwan after the 90-day pause, the company fears customers might postpone their shipments in the second half of this year, he said.
Regarding the company’s production bases worldwide, Taiwan and China each accounted for 45 percent of its total capacity, followed by Japan at 8 percent and Malaysia at 2 percent.
The company might consider building a new production base, possibly in Southeast Asia or the US, as it expects revenue to rise from 2028 to 2032 and existing capacity might fall short, Chen said.
Last year, Advantech’s board approved the establishment of a second system assembly plant in northern California, which is scheduled to be completed by the end of this year and begin operations next year, doubling the company’s assembly and testing capacity in the US, Advantech president of the intelligent systems sector Linda Tsai (蔡淑妍) said.
About 70 percent of Advantech’s US sales come from system products, and if customers require local production, the company could shift part of its assembly to the US, she said.
Advantech is also evaluating whether to set up a surface-mount technology line, possibly in cooperation with local US firms initially, Tsai said.
In the first quarter, the company’s revenue rose 25 percent year-on-year to NT$17.35 billion (US$541.9 million), net profit grew 37 percent to NT$2.73 billion and earnings per share increased to NT$3.17 from NT$2.32, driven by rising demand for embedded computer products and intelligent systems.
Gross margin rose 0.5 percentage points year-on-year to 40.5 percent, while operating margin improved to 16.9 percent from 13.8 percent, the company’s earnings report showed.
The company expects this quarter’s revenue to total US$530 million to US$550 million — or NT$17.17 billion to NT$17.82 billion in New Taiwan dollar terms — and it forecasts gross margin to be within the range of 39 percent to 41 percent, while operating margin to be from 16 percent to 18 percent, Advantech said.
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
RSS