Industrial computer (IPC) and solution provider Advantech believes inventory levels will return to normal by the end of this year.
During a recent shareholder meeting, Advantech president of general management Eric Chen acknowledged that high inventory levels impacted the company's working capital in 2022; however, inventory value has been reduced to NT$1.1 billion, from NT$14 billion at the end of 2022. Inventory days are expected to return to around 90 days by the end of the year.
Speaking to geopolitical tensions, Advantech president of the embedded-IoT group Miller Chang noted that the company continues to expand its R&D team in Kunshan, China, which focuses on servicing the China market.
In terms of production planning, phase three of Advantech's campus in Linkou, Taiwan, is expected to be completed in the second half of this year. Advantech will also expand capacity in China
In Japan, Advantech acquired a factory in Nagota, Fukuoka Prefecture, from Omron subsidiary Omron Nohgata—production lines were updated in April 2023.
At present the Nagota factory mainly supplies the Japanese market, but in the future it will also service European and American customers.
Chang pointed out that Advantech has established a service center in South Korea and has already broke ground on its North American headquarters and service center.
Additionally, Advantech has a trusted OEM with 30 SMT production lines that can help with production in Malaysia.
Advantech CEO KC Liu said Advantech previously considered setting up a factory in Southeast Asia, but due to cost issues decided to first adopt an OEM partner model in Malaysia. However, if the market continues to grow, Advantech has not ruled out the possibility, Liu added.
Liu expects the industrial internet of things (IIoT) industry will continue to grow over the next decade, noting that smart applications, along with AI and the advancement of communications technologies and cloud structures have improved the development of industrial applications.
As a result, Liu believes that Advantech will continue to see development opportunities over the next 10 years. Advantech maintains its target of hitting US$5 billion in revenue by 2030.
Article translated by Eifeh Strom
