Ralec places a hold on new orders of thick film resistors as demand soars
By Taipei Times
Posted On 26.2.2018
source: Taipei Times news
Passive components supplier Ralec Electronic Corp (旺詮) has put a hold on new orders for its thick film chip resistor series to cope with overwhelming customer demand, according to a letter the company sent to its distributors on Wednesday.
“Due to an influx of orders, the company has temporarily stopped accepting new orders for all series of thick film chip resistors. We are adjusting schedules for production and delivery to ensure all of our customers receive their products,” Ralec said in the letter, which was seen by the Taipei Times.
No specific timetable for supply resumption has been set, the company said.
The suspension could herald a new round of price hikes after Ralec raised prices for most resistor series by 15 percent on Jan. 2 primarily due to a supply crunch, First Capital Management Inc (第一金投顧) said in a note on Thursday.
Ralec could further increase prices by 15 percent, First Capital said. The company has seen its inventory run down to 30 days, below its safety level of 40 days, the securities consultancy said. The price increase is expected to add NT$100 million (US$3.41 million) in revenue to its parent company, Chilisin Electronics Corp (奇力新). Ralec shares were delisted from the local stock market following its acquisition by Chilisin last year.
Global supply of low-margin chip resistors has been constrained over the past few quarters as major suppliers from South Korea and Japan exited the market due to slim profits. First Capital said Ralec is one of few companies continuing production of such chip resistors, which are used in a wide range of electronics from computers to mobile phones, industrial devices and automotive items.
The company operates a plant in Kunshan, China, and another in Senai, Malaysia. Local government curbs on toxic emissions earlier this year lowered the company’s output from its Kunshan plant. First Capital expects the resistor shortage to deteriorate next quarter when the electronics sector enters its peak season.
Chilisin is expected to double its net profit this year to NT$2.48 billion, or earnings per share of NT$7.93, from last year, thanks to a series of acquisitions launched by the company, First Capital said. Revenue is expected to jump 28.63 percent year-on-year to NT$16.26 billion, it said.
Meanwhile, Yageo Corp (國巨), the nation’s biggest passive components maker and the parent company of Chilisin, on Thursday reported NT$3.02 billion in net profit for last quarter, soaring about 70 percent from NT$1.78 billion in the third quarter of last year. That meant more than double growth from NT$1.34 billion a year ago.
Last quarter’s earnings beat the forecast by Capital Securities Corp (群益證券), which estimated Yageo would make NT$2.42 billion, or earnings per share of NT$6.92. Yageo benefited from a persistent shortage of passive components and price increases, the brokerage said.
Gross margin climbed 13.4 percentage points to 43.7 percent last quarter, from 30.33 percent in the prior quarter and 25.44 percent a year earlier, Yageo said.
Last year, Yageo made NT$6.66 billion in net profit, up 69 percent from NT$3.95 billion in 2016. Revenue expanded 16 percent from NT$29.62 billion to NT$32.26 billion.
