Taiwan’s Yageo to raise domestic output to counter trade war, pandemic

13, Apr. 2020

tech-4907770_1280.jpg

TAIPEI, NNA – The world’s leading multi-layered ceramic capacitor (MLCC) maker Yageo Corp. is beefing up its domestic output capacity in a move to ease the headwinds from the U.S. trade war and the global coronavirus pandemic.

Taiwan’s Ministry of Economic Affairs has approved its investment plan worth NT$14.7 billion ($484 million) to increase capacity and its advanced product lineup at three plants in the southern port city of Kaohsiung, the ministry said in a statement last Thursday.

One new plant expansion project is designed for advanced products like micro-sized chip resistors to meet growing demand for 5G and automotive electronics, while the other two will churn out more MLCCs, Yageo spokesman Andy Sung told NNA on Monday.

“The outbreak of the infectious respiratory disease has further pushed our move to ramp up output outside China,” Sung said, as its operation there had been disrupted by the government’s orders to stem the spread of COVID-19.

The unresolved U.S.-China trade row had also prompted Yageo to invest NT$16.5 billion in Taiwan in early 2019 to set up a research and development center as well as bases for advanced products, the ministry said.

Yageo, the world’s largest chip resistor manufacturer, operates production bases mainly in China, which account for 70 percent of its overall output, according to Sung. “We will continue to boost our presence in China,” he added.

Yageo expects little impact from the coronavirus epidemic on its revenue in the second quarter of this year thanks to stable orders from clients, Sung said.

The Taiwanese firm logged NT$4 billion in group sales in March, a 50.4 percent jump from the previous month and 14.8 percent increase from the same month of 2019 due to robust demand and the resumption of operations at its China plants, the company said in a statement.

Its consolidated revenue in the first quarter, however, declined 12 percent from a year earlier to NT$10 billion.

The ministry’s statistics showed Taiwan has lured back 178 firms with a total of NT$739.7 billion in approved capital inflows to create 61,225 jobs, under a government policy to encourage Taiwanese firms operating overseas to move their production back to the island amid the U.S.-China trade dispute.