Supply chain
Lelon benefits from booming automotive electronics and quick charging markets, promising outlook for 2H17
Press release

Leading aluminum electrolytic capacitor manufacturer Lelon Electronics has reported August consolidated revenue of NT$649 million, a new high for single-month revenue, thanks to strong demand for passive components and the start of the third-quarter high season. Lelon's recent efforts into automotive electronics, green energy, telecom & network equipment and industrial power supplies have been generating results.

As market demand for handheld quick charging and automotive electronics will rise in the second half of the year, and production capacity at subsidiary Liton Technology will keep ramping up, Lelon's second-half 2017 revenue can be expected to trend up compared to the first half of the year.

To expand its original capacity of 35 million polymer capacitors per month, Lelon not only acquired production equipment from Matsuki Polymer last year but is also planning an upgrade of existing equipment at its Suzhou and Huizhou plants in China for the latter half of the year. A growing number of mobile devices such as smartphones and tablets now come with quick chargers, which use polymer capacitors for their reliability and safety features. As Lelon has made its way into the supply chain for leading smartphone brands, the flourishing handheld device market will spur demand for polymer capacitors in the second half.

In addition to quick charging, automotive electronics will be another long-term growth driver for the company. Amid a growing dashboard market, many automakers plan to add LCD panels to their entry-level cars at a large scale, instead of just for luxury cars, to make more comprehensive information available to drivers. Lelon has successfully penetrated into the OEM supply chain for American and European automotive electronics providers and will introduce aluminum electrolytic capacitors for automobile transmission systems in the future to enrich Lelon's product lineup of aluminum electrolytic capacitors for automotive applications. The automotive electronics market is expected to contribute 10% of Lelon's 2017 revenue.

Thanks to increasing capacity driven by rapidly growing industry demand, Lelon's subsidiary Liton Technology, which manufactures aluminum foils, has reported NT$1.295 billion in first-half 2017 revenue, up nearly 20% on year. Second-quarter consolidated revenue reached NT$699 million, up 17% both on year and on quarter. Earnings per share was NT$0.36, higher than the NT$0.01 EPS for the corresponding period last year.

Liton mainly manufactures formed aluminum foils. To expand operation, Liton joined forces with HEC Technology and co-founded Lidon Electronics Technology to increase the production of upstream etched aluminum foils, which is benefiting Liton with added revenues as well as profit margins. Booming developments in the automotive electronics market also spur growing demand for low voltage formed aluminum foil for automotive applications. Furthermore, with promising IoT and smartphone opportunities, the venture is expected to fuel the company's revenue in the future.

Lelon's August revenue hit a record high of NT$649 million, up 21.24% on year. Consolidated revenue for the period from January to August totaled NT$4.527 billion, up 14.2% on year.

Lelon is actively gearing its development toward high-end products and has been focusing efforts on high-growth sectors including high-end telecom equipment, original automotive electronics, cloud datacenters and power electronics. Expansions in 5G developments, solar power, wind power and robotics have generated positive results. Promising developments in these market segments and contribution from Liton will help significantly boost.

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