PCB factories like Compeq and Unimicron have enhanced their work resumption concerning the supply chain in mainland China and the market expects major American manufacturers to launch 5G mobile phones by the end of the third quarter, as scheduled. Therefore, delivering optimistic market views that operations should continue to accelerate this year.

 

          As Compeq benefited from the fast recovery of downstream assembly plants and its March revenue increased by 48.6% month-on-month, its performance is relatively better than expected by the market. Since the second half of 2019, Compeq has received gains from favorable production yields including high-end products, a full utilization rate, and an increasing proportion of shipments for these high-end products. So, its gross profit margin has increased from previous levels. Although the first quarter of this year had already moved into the off-season and the COVID-19 epidemic affected the utilization rate, benefits such as production yields, as well as the increasing proportion of shipments for high-end products, have continued to increase while generating profit-making performance.

 

          In the first quarter of 2020, the cumulative sales of 5G mobile phones in China were 14,06 million, with a penetration rate of 29.5%; it is also considered the fastest-selling market of 5G mobile phones worldwide. Since Compeq’s manufacturing process regarding 3-layer HDI, as well as any layer HDI, is outstanding, it has benefited from 5G business opportunities because high-end 5G mobile phones enable the upgrade of mobile phone motherboards and orders from mainland-based mobile phone plants in the second quarter maintained a relatively high level of shipments, as compared to that of the first quarter. Moreover, the epidemic has also resulted in high demands for home office and long-distance teaching NB and tablet PCs. In addition to American customers requiring shipments for new NB and tablet PCBs, operators of other brands have also increased their orders for stock. As a result, the market estimation shows that Compeq will likely achieve more than 10% of profit this quarter.

 

        Unimicron expects the utilization rate of HDI, PCB, and FPCB to rebound in the second quarter, except for the utilization rate of ABF carriers, which should maintain a high level. However, the order visibility of ABF carriers is expected to reach the third quarter. It is also considered that mobile phone boards will benefit from the upgrade trend for 5G mobile phones, therefore, the area and number of phone boards will increase. Unimicron has significantly increased its capital expenditure strategy for 2020. For its yearly expenditure, it will spend NT$16.2 billion, with an increase to NT$24.7 billion currently, and 90% of the investment is spent on carriers. Overall, Yang Mei plants have accounted for 60% to 65% of the investment to expand ABF carriers. Also, 15% of the funding is directed to mainland factories, with ABF accounting for 60% and BT accounting for 40% of the resources, whereas the plant at Suzhou, Shan Ying, and Xing Feng account for the remaining investment of 20% to 25%. (News source: Economic Daily News)