According to CCTV News, on July 31 local time, U.S. President Trump signed an executive order, setting "reciprocal tariff" rates on imports from multiple countries and regions, with specific rates ranging from 10% to 41%. This tariff list officially took effect at 00:00 on August 7. President Trump's latest tariff plan will impose tariffs higher than 10% on imported goods from approximately 40 countries.
Regarding the impact of the U.S. imposing reciprocal tariffs on electronic products, Li Dingzhuan, Chief Operating Officer of Zhen Ding, stated in an interview on August 12 before hosting an online earnings conference that tariffs have brought challenges to the global supply chain, especially the printed circuit board (PCB) industry, which mainly targets the U.S. market, facing greater uncertainty. However, according to the company's research, despite the pressure from tariff measures, the PCB industry still shows strong resilience and continues to drive growth momentum through technological innovation and diversified market layout.
Li Dingzhuan said that currently, the U.S. market accounts for about 35% of most electronic products, and the remaining 65% are distributed in other international markets, which enables the industry to partially diversify tariff risks. He emphasized that after the Trump administration announced the reciprocal tariff rates for various countries in August, there has been no significant impact on major customers' orders and overall production capacity, and market demand remains stable.
It is worth noting that emerging applications such as AI phones, smart glasses, and humanoid robots have become important drivers of PCB demand. These innovative products not only put forward higher requirements for PCB technical specifications but also continue to double the related output value. The industry generally believes that these emerging fields can make up for potential fluctuations caused by tariffs in the traditional consumer electronics market.
Shen Qingfang, Chairman of Zhen Ding, said that the integration and technological upgrading of the PCB industry chain are the keys to coping with tariff challenges. From material selection, process optimization to the introduction of intelligent manufacturing, all help to improve production efficiency and product added value, thereby consolidating international competitiveness.
Looking to the future, Shen Qingfang emphasized that although there are still variables in the global trade environment, the industry's confidence remains stable. Industry players will continue to focus on high-end technologies and diversified application fields, strengthen international cooperation, and actively expand non-U.S. markets to inject more growth momentum into overall operations.
According to previous announcements, Zhen Ding's cumulative consolidated revenue in the first seven months reached 91.638 billion New Taiwan dollars, a year-on-year increase of 16.91%, setting a new record for the same period in previous years. Zhen Ding explained that exchange rate fluctuations led to a slight year-on-year decrease in revenue denominated in New Taiwan dollars, but driven by customers' stockpiling demand, revenue in July showed a double-digit year-on-year increase in U.S. dollars. Among them, IC substrate revenue continued to grow, and the stockpiling period for new mobile communication and consumer electronics products has begun, with the overall performance still in line with expectations.
Observing the product structure, Zhen Ding's IC substrate revenue share is expected to increase from 3.3% last year to 5.2% this year, and further expand to a high single-digit level next year. The ABF substrates, which have been cultivated for many years, have seen a stable increase in the utilization rate of the Shenzhen factory, and the new Kaohsiung factory is also scheduled to start operation in 2026, which will help optimize supply momentum and customer portfolio simultaneously. In addition, the demand for AI servers and emerging applications continues to increase, and the revenue contribution of related businesses is expected to rise to 7% - 8%, becoming one of the core growth drivers in the next two years.
Although Zhen Ding's cumulative revenue has increased by more than 10% year-on-year, profits are still challenged by exchange rate and raw material cost fluctuations. It is estimated that every 1% change in the exchange rate will affect the gross profit margin by approximately 0.2 - 0.3 percentage points. However, with the start of the peak season for mobile phones, the increase in the proportion of high-end products, and the production capacity distributed in mainland China, Taiwan China, Thailand, etc., which have flexibility in responding to exchange rate and geopolitical risks, the gross profit margin is expected to rise to 20% in the third quarter, and the profit structure in the second half of the year is expected to improve significantly.
Looking ahead, institutional investors predict that Zhen Ding will continue the momentum of the consumer electronics peak season and benefit from the growth in ASP of high-end products driven by the rising penetration rate of AI applications. The annual revenue is expected to exceed 180 billion New Taiwan dollars, a year-on-year increase of nearly 10%. With the continuous advancement of substrate market share and the upgrading of revenue structure driven by capacity expansion, the upward trend will continue next year.
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Source: United Daily News, Commercial Times
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