As the consumer electronics market enters its traditional peak season in the latter half of 2024, Taiwan's specialty chemical materials distributor, Topco Technologies Corp, is optimistic about the growth in server, PC/notebook, and smartphone shipments driven by AI technology. According to Topco chairman Chen-cheng Pan, this surge is expected to significantly boost the company's shipments of silicone solutions for heat dissipation and materials for components.
Pan noted that the peak shipment season for cosmetic shipments, particularly sunscreen products, ended in April. Following this, customers have been developing new formulas and products, with a focus on items such as lipstick, which require relatively less silicone material.
To address intensifying competition in the Chinese market, Topco has restructured its core businesses into six major application areas: consumer electronics, heat dissipation, cosmetics, automotive, medical, and leisure. These sectors now contribute 60% of the company's revenue, with the remaining 40% coming from traditional industries such as food, petrochemicals, construction, textiles, and adhesive tapes.
Topco's current product development is centered on cosmetic ingredients for European and American OEMs and social media influencers; heat dissipation materials for AI servers, AI PCs, and AI smartphones; ESG-friendly materials like water-based and solvent-free release agents, recyclable materials, and PFAS-free options; and materials for the power industry, particularly those needed for Taiwan Power Company's grid resilience plan.
In response to the industry's focus on thermal management, Pan emphasized that heat dissipation is crucial not only for servers, PCs/notebooks, and smartphones, but also for networking equipment, industrial computers, optical modules, electric vehicle on-board chargers (OBC), and autonomous driving systems. He is confident that silicone materials will play a pivotal role in achieving effective heat dissipation, driving strong market adoption.
Topco primarily distributes materials from Japan's Shin-Etsu Chemical. Pan highlighted that since the pandemic, Shin-Etsu has been the only major global supplier to continuously expand its production facilities and equipment, with a focus on thermal management materials production in Japan.
In the second quarter of 2024, Topco's revenue rose 8.75% sequentially and 12.93% year-over-year to NT$1.918 billion (US$59.39 million). For the first seven months of the year, revenue reached NT$4.371 billion, up 10.2% year on year.
China was the largest market for Topco in the first half of 2024, accounting for 56% of sales, followed by Taiwan at 36%, and Southeast Asia and other regions at 8%. Pan pointed out that due to the "China+1" trend, many customers have been shifting their orders to Southeast Asia and other regions since 2022, a trend that continues to gain momentum. He expects the revenue contribution from Southeast Asia to increase notably by the second half of 2025.
