Automotive PCB specialist Chin-Poon Industrial swung to net profits of NT$89 million (US$3.2 million) in the second quarter of 2021 from losses a year earlier, with gross margin climbing 5.99pp on year to 8.07%.
Chin-Poon pointed out that supply of automotive chips has continued to improve thanks to support of Taiwan Semiconductor Manufacturing Company (TSMC) and it is driving up demand for automotive PCBs. If the improvement can go on in the second half, the company's orders are also expected to pick up more significantly, the company noted.
The company has received significant amounts of orders but labor shortage is the biggest issue that the company is facing.
Chin-Poon's profits increased dramatically in the second quarter because of rapidly recovering demand in the automotive market. The company has already resumed normal operation at its plant in China, while profitability from its plant in Thailand also improved dramatically after a reorganization.
Chin-Poon has also been passing the increasing costs from raw materials to its clients to minimize the potential impact on its gross margin.
With robust orders from clients and the compensation from the insurance company for its fire-damaged plant in Taiwan, Chin-Poon expects its third-quarter profitability to increase from a quarter ago.
However, the resurging COVID-19 pandemic in Malaysia, a major hub for backend services, is expected to impact negatively automotive chip production and logistics in the third quarter, the company said.
Article translated by Joseph Tsai
