Chip tester King Yuan Electronics Co (京元電子), which counts Nvidia Corp and Broadcom Inc among its customers, yesterday raised this year’s capital expenditure by 37 percent to a new record high of NT$37 billion (US$1.24 billion) from its previous estimate, to accelerate capacity expansion amid growing demand for artificial intelligence (AI) chips and customized application-specific ICs for AI applications.
It was the second hike by King Yuan this year from a NT$26.97 billion budget approved by its board of directors in May, according to a company filing with the Taiwan Stock Exchange yesterday.
On an annual basis, that represented a spike from NT$14.86 billion spent last year on new facilities and equipment.
Photo: CNA
The company in May also said it has acquired a new manufacturing facility for NT$327 million in Miaoli County’s Toufen Township (頭份) in a bid to expand high-end chip testing capacity.
In addition, King Yuan said the board has approved a new capital injection plan of S$100 million (US$77.8 million) for its Singaporean subsidiary, KYEC Singapore Pte Ltd, according to a separate company filing.
The new funding plan triggered speculation that King Yuan is mulling to build a new fab in the city-state amid growing geopolitical risks.
As part of the firm’s capacity expansion efforts, the board of directors yesterday also approved a plan to issue 80 million new shares via a rights issue to its existing shareholders to fund the purchases of new manufacturing equipment.
King Yuan yesterday reported that net profit soared 98 percent to NT$6.47 billion in the first half of this year, compared with NT$3.27 billion in the same period of last year.
That translated into earnings per share of NT$5.29 in the first half, up from NT$2.68 a year earlier.
Gross margin rose mildly to 34.56 percent from 34.19 percent.
Revenue expanded 25.34 percent year-on-year to NT$16.68 billion in the first half of this year, from NT$12.52 billion.
The company did not give the latest revenue breakdown, but company data showed that final test services was the biggest revenue contributor in the first quarter, accounting for 45.7 percent. Wafer probing services came next with a 37.2 percent share.
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