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Attendees take pictures of new iPhone models during an Apple launch event in Cupertino, California, U.S. September 12, 2017.   © Reuters
Business

Taiwan's tech sector soared in August thanks to new iPhones

Combined sales of 19 companies monitored by Nikkei hit $29.8bn

TAIPEI -- Apple and its new gadgets helped to push the combined sales of 19 tech companies monitored by the Nikkei Asian Review to 896.3 billion New Taiwan dollars ($29.8 billion) in August.

It was the highest monthly figure this year and represented year-on-year growth of 4.34%.

Among the tech heavyweights, 14 posted year-on-year revenue growth, with some hitting their highest monthly sales figure for 2017, our data shows.

The numbers are in line with Taiwan's exports, an important gauge of global demand for gadgets.

The island's exports in August rose 12.7% on the year, their 11th consecutive month of expansion, the finance ministry said last week. The momentum was driven by electronic components that will find their way into new iPhones, the ministry added.

"Contract makers have been very busy getting their key technologies and production ready [these past few months]," Pegatron Chairman Tung Tzu-hsien said on Monday, adding that other smartphone makers are also readying new models.

Nine of the companies supply Apple, and their total revenue amounted to NT$715.86 billion -- the highest amount for a single month this year and a year-on-year expansion of 6.38%.

iPhone assembler Pegatron is among the nine.

Largan Precision, which makes high-end camera lenses for the iPhone, reported a 3.95% year on year increase in revenue last month to NT$5 billion -- also a high for the year.

"As the third quarter is traditionally a peak period, consolidated revenue for September is likely to grow [from the previous] month," Largan said in a filing to the Taiwan Stock Exchange last week.

Catcher Technology, meanwhile, posted record sales of NT$8.52 billion. The company is a key metal casing supplier to Apple.

Taiwan Semiconductor Mfg. (TSMC) said its August revenue of NT$91.9 billion was its third-highest total ever.

Analysts said TSMC is soaring thanks to its contract to supply Apple with A11 processors for the new iPhones. The chips use a 10-nanometer process -- TSMC's most advanced commercial production technology.

Hon Hai Precision Industry, better known as Foxconn, the key iPhone assembler, saw its sales inch up 1.31% from a year earlier to NT$316.8 billion.

Foxconn said its computing devices posted the strongest revenue growth last month, followed by communications and consumer electronics gadgets.

Foxconn shipments are set to get a big boost later this year when the new iPhones go on sale. Apple has reportedly contracted the assembler to make 90% to 95% of the models that will come with screens made of thin, bendable layers of organic light-emitting diodes, or OLEDs.

Previously, Apple has only made iPhones with liquid crystal displays.

"We expect the OLED iPhone 8 to lead to a big replacement cycle due to in part to marketing hype, but also because of the introduction of new functions compared to previous models," said Arthur Liao, an analyst from Fubon Research in Taipei. "The momentum could carry into the end of the first quarter of 2018. Taken as a whole, these factors suggest a positive outlook for Hon Hai from next year until 2020."

Nikkei staff writer Chien Chia-Hung contributed to this report.

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