According to Taiwanese media reports, Yu Huan (3276-TW), in which Chizhao Technology (8213-TW) holds a 44.21% stake, announced on May 20th the suspension of PCB self-production operations at the Zhuyu Technology automotive board factory in Kaohsiung, Taiwan. They will instead adopt a fully outsourced production and delivery model. The company has decided to temporarily halt self-production operations and will consider restarting them when conditions are favorable for profitable production. Yu Huan expects that this operational adjustment will reduce current operating losses and facilitate necessary operational changes.

Yu Huan spokesperson Hu Xiuxing explained that the production at the Kaohsiung Zhuyu Technology automotive board factory will be suspended, and operations will be conducted solely through outsourcing.

In the first quarter of 2024, Yu Huan reported negative gross revenue of NTD 343 million, with a post-tax loss of NTD 8.1 million. This represents a shift from profits to losses compared to the same period last year, with a loss per share of NTD 0.12.

Yu Huan controls the Kaohsiung Zhuyu Technology automotive board factory, which currently has a monthly production capacity of approximately 400,000 square feet. It was acquired by the Chizhao Group in 2015 as part of the PCB and electronics business split from the Japanese company Hitachi Chemical. Subsequently, it became controlled and operated by the Yu Huan subsidiary within the group, marking Chizhao's entry into the automotive board production field.

Looking at Chizhao's consolidated revenue in the first quarter of 2024, the majority comes from optoelectronic boards, accounting for 49%, followed by NB boards at 27%, automotive boards at 12%, and information boards at 10%. The automotive board orders secured by Yu Huan also make a significant contribution to the group. The Yu Huan management pointed out that although production operations at the Kaohsiung Zhuyu factory are currently suspended, order acquisition continues, and full outsourcing production will be implemented.

With the rising market demand for Artificial Intelligence (AI) in the ICT industry, spreading from the network and server ends to consumer PCs and smartphones, Chizhao PCB factory has entered the sampling stage for AI PC printed circuit boards. Furthermore, Chizhao's capital expenditure for this year exceeds NTD 1.5 billion, maintaining a high investment level for the third consecutive year.

Chizhao, the world's largest optoelectronic board manufacturer, has entered the sampling stage for AI PC-related printed circuit board demands from brand manufacturers and EMS factories. It is expected that mass production will be arranged at the Wuxi factory in mainland China. In addition, to meet the demand for back drilling and HDI processes for this product, it is projected that capital expenditure in 2024 will also exceed NTD 1.5 billion, maintaining a high investment level for the third consecutive year.

Regarding Chizhao's capital expenditure for 2024, the company believes that the development trend of AI PCs presents new opportunities and higher added value for PCB manufacturers. Therefore, Chizhao is actively expanding its equipment and processes. It is expected that the benefits will gradually become evident, with the most significant impact anticipated from 2025 onwards.

In line with investments by EMS factories such as Compal Electronics (2324-TW), Hon Hai Precision Industry (2317-TW), and Wistron Corporation (4938-TW) in Vietnam, the surrounding supply chain of PCB and PCBA factories has also begun to move. This includes companies like HannStar Display (3044-TW) and Chizhao, which have obtained production capacity in Vietnam. Chizhao's new production capacity of 300,000 square feet per month in Henan Province, Vietnam, has entered mass production.

Currently, Chizhao's production capacity is distributed in Taoyuan Pingzhen and Kaohsiung in Taiwan, Wuxi in mainland China, Zhongshan in Guangdong, and Suining in Sichuan. The new factory in Henan Province, Vietnam, represents Chizhao's first overseas production capacity beyond the two sides of the Taiwan Strait, with an investment of USD 10 million, mainly for automotive and optoelectronic PCBs. The management of Chizhao stated that Vietnam has a significant number of Taiwanese network equipment factories. After Chizhao's new factory in Vietnam starts production, it will also support the production of some network boards.

-----------------------------------------------------------------

Source: Juheng.com (Reporter: Zhang Qinfa)

Statement: We respect originality and value sharing; the copyright of the text and images belongs to the original author. The purpose of reposting is to share more information, which does not represent the position of this account. If it infringes on your rights, please contact us promptly, and we will delete it at the first opportunity. Thank you.