Source: DigiTimes news
Pan International, an affiliate of the Foxconn Group, expects sales from its electronic manufacturing service (EMS) business to pick up in the second half of 2018 as the tight supply of passive components has eased.
Some of the company’s shipments were delayed in the first half due to passive component shortages. It also undermined the company’s sales during the period, but Pan International said it will accelerate its shipment pace, aiming to catch up with its original shipment target for 2018.
With demand for games consoles and panel-related products beginning to pick up due to seasonal factors, Pan International expects the third quarter to be the peak of its operation in 2018 with sales in the second half of the year to be stronger than those in the first.
Currently, Pan International’s main businesses are manufacturing of electronics components including PCB, connector and cable as well as retail distribution of consumer electronics and PC peripheral products.
With the Foxconn Group’s investments in Sharp, Pan International is now a component supplier of Sharp and a distributor of Innolux and Sharp’s panel and optical components. Currently the component supply business contributes around 40% of its revenues with the remaining coming from the product distribution business.
In August, Pan International had consolidated revenues of NT$2.62 billion (US$84.91 million), up 9.55% on month and 3.31% on year with combined consolidated revenues for the first eight months of 2018 growing 5.24% on year to arrive at NT$17.26 billion.
For the second half, the company currently only has an order visibility until the end of September, but is still optimistic about the market in the third quarter. Although its panel sales growth is expected to weaken in the third quarter, gross margins from the product line will remain in a good shape.
At the same time, the growing sales from the EMS and PCB businesses will boost the company’s overall results, including gross margins, for the second half.
Pan International will see some of its products such as connectors and cables affected by the hike in US tariffs and is already seeking remedies to minimize the impact. However, the company’s sales to the US in 2017 and the first half of 2018 only accounted for 5% of the overall revenues and therefore the issue is unlikely to hurt the company’s profitability significantly.
Pan International at the moment has plants in China’s Shandong, Dongguan and Jiangxi as well as Thailand and Malaysia. The company’s PCBs are primarily manufactured at the Shandong plants, while connectors and cables are made in Dongguan, Jiangxi, Thailand and Malaysia. The EMS is provided at Dongguan and Malaysia facilities.
