Taiwan-based networking device makers, including Sercomm, Arcadyan and Accton Technology, remain upbeat about their sales this year, as they still enjoy brisk order visibility despite disruptions in the supply chain, according to industry sources.
Several telecom device makers said their order visibility has extended to the first quarter of 2023, even though demand for consumer electronics products, including smartphones and notebooks, is said to be weakening.
The tightened measures against COVID-19 in China's manufacturing hubs Shenzhen, Shanghai, and Kunshan have left limited impacts on their shipments and operations, as they have dispersed production bases across several sites, the suppliers said.
Since the US-China trade war started in 2018, Taiwan-based telecom device makers have gradually reduced their stakes in China by shifting some production bases to Taiwan, Vietnam, the Philippines, India or other locations.
For example, Sercomm's plant in China's Suzhou used to contribute over 90% to its revenues, but the ratio was lowered to 40% in the wake of the trade war.
The successive lockdowns in Shanghai and Kunshan might affect Sercomm's shipments to a certain degree, but the company will weather the impact soon because it has other production bases and it commands strong demand from telecom operators, observers said.
Sercomm reported NT$4.79 billion (US$164.3 million) in revenues in March, up 28% on month and 41% on year - a new monthly high. Its revenues in the first quarter totaled NT$12.66 billion, up 32% on year, a new quarterly high.
Its revenues in April might be somehow affected due to shipment disruptions in Shanghai and Kunshan, and yet its revenues in the second quarter are still likely to pick up from the first quarter's level, observers said.
Arcadyan in March also reported record high revenue of NT$3.62 billion, up 10.4% on month and 6.54% on year. Its first-quarter 2022 revenues reached NT$10.3 billion, hitting a quarterly record.
Although the company's factory in Kunshan accounts for 70% of its total shipments, the city's lockdown has had limited impacts on its operations, Arcadyan said.
Prior to Kunshan's lockdown, the factory had geared up its production, and the company looks to resume normal shipments soon after the restrictions are lifted, it said, anticipating revenue growths in the following quarters.
Arcadyan has built a second factory in Vietnam, which is set to enter volume production in the second quarter of 2023, it said.
The primary variable in 2022 is materials supply, the company said, but materials shortages have eased recently compared with 2021.
By the end of the second quarter, its IC suppliers will provide new products using 16nm manufacturing process, which will further ease chip shortages, Arcadyan said.
Unlike consumer electronics, Internet connectivity is increasingly regarded as a daily necessity, especially after the COVID-19 broke out, sending more people staying and working at home, the suppliers said.
Chip shortages are also compeling clients to place orders ahead of their original schedules, benefiting telecom device suppliers, they said.
Accton also sees robust orders from clients. Its March revenues recorded a new monthly high of NT$6.75 billion, up 81.4% on month and 30.04% on year. Its first-quarter 2022 revenues totaled NT$15.73 billion, up 19.18% on year, also a new quarterly high. Shenzhen's lockdown has not created notable impact on Accton's revenues so far.
