Chang Wah Electromaterials (CWE), a leading Taiwan-based semiconductor materials distributor, is witnessing a buoyant period driven by strong demand for advanced packaging. This demand surge is sustaining its order visibility through 2026.
In an earnings conference on February 11, CWE highlighted its robust fourth-quarter performance, achieving the third-highest revenue in its history despite facing challenges in the automotive and industrial control sectors.
CWE reported consolidated revenue of NT$4.492 billion (approx. US$137 million) for the fourth quarter of 2024, marking a 1% increase from the previous quarter and an 8% rise year-over-year, with a gross margin of 19.8%. For the full year, the company's performance is expected to surpass that of 2023, projecting a total revenue of NT$17.231 billion and more than 10% growth in gross profit and operating income compared to the previous year.
This growth is driven by the rising demand for advanced process equipment from Japanese manufacturers. CWE's partnership with Sumitomo Bakelite enhances its market presence by delivering essential packaging materials. Additionally, the new factory in Kaohsiung's Dafa Industrial Zone is expected to increase revenue starting in 2025.
Chang Wah Technology (CWTC), a subsidiary of CWE, achieved a 9% year-over-year increase in fourth-quarter revenue, reaching NT$3.169 billion despite reduced demand in the automotive and industrial sectors. This shift affected margins, resulting in a 5% drop in gross profit and an 8% decline in operating income quarter-over-quarter. Conversely, the consumer electronics sector saw strong demand, altering the overall revenue composition.
For CWTC, fourth-quarter revenue increased significantly in the 3C sector (computer, consumer, and communication), which made up 47% of total revenues. Meanwhile, contributions from the automotive and industrial sectors decreased to 28% and 22%, respectively. In terms of products, IC lead frames generated the most revenue, followed by QFN packages, which showed strong counter-cyclical growth, indicating solid demand in consumer and communications electronics.
In 2024, CWTC achieved NT$11.987 billion in revenue, marking a 4% growth. The company forecasts improvements in profit margins, with a 24.1% gross margin and a 13.8% operating margin. Net profit attributable to the parent company is projected to rise by 21% to NT$1.896 billion.
JMC Electronics, a subsidiary of CWE, is gaining momentum from China's recent economic stimulus, which has led to urgent restocking orders. However, there's cautious optimism about the sustained impact on the COF market due to the uncertain economic environment.
Article translated by Jingyue Hsiao
