Taiwan-based Flexible Printed Circuit (FPC) manufacturer Complex Micro Interconnection Co. expects that FPC shipment momentum in third-quarter 2023 will gradually recover as customer inventory levels decrease. The company is also stepping up the construction of a second production base in Thailand in response to global supply chain shift and the bottleneck in the surface mount (SMT) back-end process.
A key supplier of Panasonic's Toughbook rugged laptops, Complex Micro Interconnection shifted its focus to niche markets a decade ago after recognizing the challenge of competing on scale and price with larger FPC makers like Flexium Interconnect. In 1997, the company secured orders from Panasonic to supply wirings for its military-grade notebooks "Toughbook", and after 2000 it expanded its offerings to include flexible boards. The company anchored itself in Panasonic's suppy chain as the latter shifted the research and production of notebooks to Taiwan. Currently, 80% of Panasonic's rugged laptop orders go to Complex Micro Interconnection. The Taiwan-based company, in fact, sees 50% of sales coming from the military sector, though automotive and medical products are also its focuses.
For the first quarter of 2023, Complex Micro Interconnection saw revenue at NT$530 million (US$17.3 million), a 29% year-on-year decrease. However, due to the recognition of inventory recovery benefits, gross profit margin increased to 26.76%, leading to a 10.47% growth in operating profit to NT$61.95 million. Nevertheless, net profit attributable to the parent company after tax was NT$37.85 million, a 43.5% year decrease, primarily impacted by non-operating exchange losses.
As customers in the industrial handheld device sector are still in the process of inventory reduction, revenue for April was NT$147 million, lower than March's performance but a 6.07% year-on-year increase. The inventory reduction process for industrial handheld devices still lags behind that of consumer products by approximately one quarter, and it is still awaiting demand to return. Accumulated revenue for January to April was NT$678 million, an 18.36% year-on-year decrease.
In comparison, major customers shows stable demand for military-grade notebooks and tablets. Customers who were affected by the pandemic and halted production in 2022 have now resumed normal shipments, sustaining order growth, according to the company. Additionally, shipments of commercial notebooks and other products have rebounded, while consumer electronics sector has fared better compared to the fourth quarter of 2022.
