MLCC and chip resistor supplier Walsin Technology will carry on its capacity expansion project in Taiwan, but is cautious about its performance in the third quarter, according to company chairman Chiao Yu-heng.
Unfavorable global trade conditions and Huawei's troubles have created uncertainty on the demand side, said Chiao, adding that Walsin tends to be conservative with regard to business outlook for the third quarter.
The escalating US-China trade war may prompt assembly companies to relocate their production lines, with Walsin being among the component suppliers set to be affected, Chiao indicated. Walsin has factory sites in Taiwan, Southeast Asia and Mexico, and is gearing up for the impact, Chiao added.
Walsin is also keeping a close eye on tax changes, another factor behind the passive component's caution about its performance in the third quarter and even all of the second half of this year, Chiao noted.
Nevertheless, Chiao said that he believes the passive component market's long-term outlook remains promising. The emerging automotive and 5G applications will be driving high-end passive component demand growth. Therefore, Walsin's expansion project stays on track, according to Chiao.
Nevertheless, Walsin will push back installing new equipment and facilities by one to two quarters to reflect demand adjustments, said Chiao. Walsin's capex this year will be slightly higher than the NT$6 billion (US$193.3 million) allocated in 2018, Chiao continued.
Walsin has seen its inventory levels return to normal, and utilizes 50-60% of production capacity, Chiao disclosed. Walsin's supply of certain small-volume devices is still tight, Chiao added.
Walsin chairman Chiao Yu-heng
Photo: Julian Ho, Digitimes, June 2019
Article translated by Jessie Shen
