ASC 100: Toyota No. 1 by revenue; half of top 50 with strongest revenue growth are Chinese firms

Digitimes, an Asia-based premium source of tech supply information, has just released its 2021 Asia Supply Chain 100 (ASC100) research results. In terms of 2020 revenue, Japan's Toyota Motor, South Korea's Samsung Electronics and Taiwan's Hon Hai Precision (Foxconn) are the top three in ASC100, a freshly launched research on Asia's top-100 tech firms. The ASC 100 research is a study based on the companies' revenues, profit and market cap that will be renewed annually.

Among the top 25 with the highest revenue, 11 are tech products/equipment suppliers including Samsung Electronics, Hon Hai, Hitachi, FII, Legend Holdings, LG Electronics, Lenovo Group, Pegatron, Quanta, Xiaomi and Compal. Nine are automotive manufacturers or automotive components/equipment suppliers. There are five automotive manufacturers in the top 10, indicating traditional automakers' large-scale revenue can hardly be overlooked.

Breaking down ASC100 by headquarters locations, Japan has 37 firms, China 33, Taiwan 14, South Korea 11, India four and Indonesia one. By countries that have ICT industries and supply chains, Japan and China represent 65.7% of the revenue, 56% of the earnings and 58.5% of the market cap.

Breaking down ASC100 by industries, there are 26 tech products/equipment suppliers, making up the largest group. The second largest group comprises 24 automotive manufacturers. ASC100 also include 13 machinery suppliers, 12 electronics component suppliers, 10 automotive components/equipment suppliers, nine consumer electronics suppliers and six semiconductor suppliers.

In the face of the pandemic, 40 firms among the top 100 with the highest revenue experienced decline in 2020 revenue from the previous year. It should be noted that although automotive manufacturers are in the front ranking in terms of revenue, they delivered lackluster performance in 2020. Few among them could maintain growth. In contrast, China's automotive components/equipment suppliers performed more brilliantly. This goes to show that China being able to contain the COVID-19 outbreak in the second half of 2020 and its widespread availability of digital payment and e-commerce allowed it to tap contactless economy opportunities and offset pandemic effect. Some firms in other countries with supply chains spread throughout the world sustained more significant impact from COVID-19 and component shortage.

The group of automotive manufacturers and components/equipment suppliers among ASC100 has the highest number of firms experiencing revenue decline, reaching 22 firms (64.7% of the two groups). Most of them are based in Japan. Nissan Motor sustained the most serious setback, its revenue declining 13% and its profit margin falling 9.6pp. Among the top 50 enjoying the highest revenue growth, 26 are headquartered in China, 13 in Taiwan, six in South Korea and five in Japan.

There are firms that managed to reap the benefit from the pandemic as surging remote work, web conferencing and online learning needs fueled growth for semiconductor, consumer electronics, notebook suppliers and OEMs. We have also observed the rise and fall among Apple's OEMs - Goertek and Luxshare Precision delivering 64.6% and 48.3% growth while Wistron, which sold its plants in China to Luxshare Precision, and Pegatron registering only 1% and 7.5% growth.

According to Tom Lo, manager, project research, Digitimes, who is in charge of the ASC100 research, revenue serves as an indicator of a firm's status in the supply chain and also the first step in studying and assessing a firm. When ranking Asian corporations by their 2020 revenue in US dollars, Digitimes found Japan and China have comparable numbers of firms making their way into the list. This reflects the legacy that the supply chain has created over the past half century during which Asia gradually rises to become the world's manufacturing hub.

If cross referencing revenue and earnings, there are 23 firms that enjoyed growth in both revenue (more than 10%) and earnings. Among them, 11 are based in China (the top five are Changan Automobile, BYD, Xiaomi, BOE and Wingtech), 9 in Taiwan (the top five are TSMC, Innolux, Mediatek, Asustek and ASE), one in Japan (MinebeaMitsumi) and one in Korea (LG Innotek). Among the top 10 most competitive firms, assessed by examining their revenue growth, eight are located in China. Taiwan's Mediatek and TSMC are ranked No. 5 and No. 7 with 37.3% and 31.3% revenue growth respectively. China's Longi and Goertek, ranked No. 1 and No. 2, delivered more than 60% revenue growth in 2020 while third place Luxshare Precision also registered nearly 50% annual revenue growth.

In the face of the US-China trade war and COVID-19, the global supply chain has begun efforts to diversify production and enhance supply chain resilience. However, the fact that Chinese firms represent half of the top 50 firms with the highest revenue growth shows that China's "dual circulation" strategy and epidemic control measures are working effectively.

The move toward shorter supply chains and localization is well underway as a result of the pandemic. The sudden spike in COVID-19 infections in Taiwan and Vietnam in the first half of 2021 came as a surprise. The COVID-19 outbreak and vaccine availability will continue to dictate supply chain changes and test supply chain resilience.

Despite COVID-19 disruptions to supply chain operations and semiconductor shortage, Japan's Toyota, with outstanding corporate governance, secures its No. 1 spot in terms of both 2019 and 2020 revenue.
Photo: Digitimes file photo

Source: Companies, compiled by Digitimes, May 2021