Chenming Electronic Tech. Corp.




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MIM new production capacity in place Chenming will gain from wearable device orders



Chenming(3013) Metal Injection Molding (MIM) production capacity surges, the company added a continuous furnace, the first quarter started the trial production, by the end of this quarter, it is expected to enable the full capacity. The company estimated by the end of the second quarter, MIM total capacity will rise by 40%, revenue can be accounted for about 50%. The increased production capacity is helpful to win more wearable device orders.

The general manager Hu Baosheng said that the market is slow in the first half of this year, not only the mainland mobile phone market downturn, but also the NB, and DT market is relatively light, the PC and server-related revenue share more than 50% of the total revenue of Chenming, which is the major operation of the company. Therefore, operation revenue of the first half of the year has been is suppressed.


However, the MIM main application is in the wearable device business, which has progressed. Hu Baosheng pointed out that the company added a continuous furnace, the last quarter started the trial production stage, and this quarter is expected to be fully operational. The total number of continuous furnace of Chenming increased to two. With the original 12 batch furnace to calculate the increase of production capacity, the total MIM capacity is expected to increase by 40%. The new furnace capacity can start to contribute to revenue in June. It is conducive to Chenming wearable device business. In fact, the watch shell orders from US customers has been schedule to ship since the beginning of the third quarter.


Hu Baosheng said that as Apple Watch has introduced metal shell, the watch shell application with MIM will tend to be more popular. In the first quarter, MIM revenue accounted for 35% of the total revenue. In the second quarter with the watch shell order incentives, capacity utilization climbed, MIM revenue is expected to account for 50% of the total revenue.


This year, Chenming will be the first time to participate in the Taipei International Computer Show (Computex), Hu Baosheng said the company actively develop new white box server customers, production racks, also provide Solutions. Besides partner with Quanta (2382) to produce sever chassis, Chenming can provide a solution to the white box customers, who is limited by the scale and cannot work with the first-tier suppliers. In addition, Hu Baosheng this year will personally participated in the computer show for Chenming. It will continue to join the exhibit in the future.

After the first quarter, Chenming has the net loss of NT$12 million, the net loss of NT$0.12 per share. Although the first half of the electronics industry market is slow, but Chenming operation in the second quarter will be better than the first quarter. The operation is expected to pick up after the first quarter. The annual revenue also determined to exceed last year's level.

Reporter 李淑惠/Commercial Times