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.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
POWELL SUCCESSOR: US Fed Governor Adriana Kugler’s resignation gives Donald Trump an opening on the board, potentially accelerating his decision on the next chair US President Donald Trump suddenly has a chance to fill an opening at the US Federal Reserve earlier than expected, after Fed Governor Adriana Kugler announced her resignation on Friday. It might also force him to pick the next Fed chair months sooner than he had anticipated. “The ball is now in Trump’s court,” LH Meyer/Monetary Policy Analytics Inc economist Derek Tang said. “Trump is the one who’s been putting pressure on the Fed to do this and that, and Trump says he wants to have his own people on. So now he has the opportunity.” Kugler’s exit unfolds amid unprecedented public pressure
RSS