Yageo lands Matsushita orders for MLCC

Taipei, August 13, 2004 (CENS)--Yageo Corp., currently Taiwan's largest supplier of passive electronic components, recently secured orders for its monolithic ceramic chip capacitors (MLCC) from Matsushita of Japan.

The contracts, according to Yageo's executives, will begin to contribute to the company's revenues next quarter.

The contracts came shortly after Matsushita was reported to increase outsourcing orders to Taiwan on cost concern.

Yageo reported post-tax earnings of NT$157 million (US$4.6 million at US$1:NT$34) on revenue of NT$4.5 billion (US$13 million) last quarter alone. The revenue represented a 7.5% gain from first quarter this year. The company earned NT$0.25 per share after deducting from tax throughout last half and its profit margin rose to 30.1% last quarter, beating market expectations.

The company's president, Remko Rosman, pointed out that world market of passive electronic components had begin returning to normal pace early this month from July, the bottom of this quarter's business.

To keep a balance between supply and demand of this market, the company would lower capacity utilization ratio of its MLCC production to 85% some time this quarter from last quarter's 90% and maintain the ratio of its chip-resistor production at 90% this quarter. Currently, the company puts out 11 billion MLCCs a month and 21 billion chip resistors a month.

The company projected to lower its inventory backlog of MLCCs to 2.1 months some time this quarter from last quarter's 2.3 months. In first quarter this year, the company's pile-up of the devices was only 1.9 months. For its chip resistors, the backlog increased to two months last quarter from first quarter's 1.8 months. Throughout this quarter, the company will maintain inventory of its chip resistors at two months. Rosman pointed out two months is a reasonable backlog period for the company.