Yageo Corp, Taiwan’s largest passive component manufacturer, reported a 9.6% quarterly profit decline as foreign exchange losses and acquisition-related expenses weighed on second-quarter results.
The company posted NT$5.00 billion ($168.5 million) in net income for the three months ended June, down from NT$5.52 billion in the previous quarter. Earnings per share fell to NT$9.74 from NT$10.77 the prior period. The company’s revenue reached a quarterly record of NT$32.77 billion ($1.10 billion), rising 5.4% from the previous quarter.
Currency headwinds proved costly, with Yageo booking NT$415 million ($14.0 million) in foreign exchange losses during the quarter. The company also recognized NT$150 million ($5.1 million) in advisory fees related to its contested bid for Japan’s Shibaura Electronics, plus NT$379 million ($12.8 million) in undistributed earnings tax provisions.
Yageo’s hostile takeover attempt for sensor maker Shibaura Electronics remains under regulatory review in Japan, with the company expecting approval from the Ministry of Economy, Trade and Industry by August 1. The Taiwanese firm faces competition from Japan’s MinebeaMitsumi in the ¥6,200-per-share bidding war.
Despite the profit pressure, CEO David Wang expressed optimism about artificial intelligence-driven demand boosting specialized component sales. The company maintained its book-to-bill ratio above 1.0, indicating healthy order momentum.
For the first half, Yageo generated NT$63.88 billion ($2.15 billion) in revenue, up 6.6% year-over-year. The company plans to increase capacity utilization for specialty products from 80% to 85% in the third quarter while maintaining general product utilization at 70%.
Management guided for low single-digit revenue growth in the current quarter, citing continued strength in AI-related computing and enterprise applications. However, the company acknowledged ongoing challenges from trade tensions and geopolitical risks that could affect customer inventory levels.
The Shibaura acquisition, initially announced in February with a ¥65.57 billion ($429 million) price tag, represents Yageo’s push into the sensor market following its 2023 purchase of Schneider Electric’s sensor unit for €723 million. Success would make Yageo a dominant player in negative temperature coefficient thermistors used in AI data centers and electric vehicles.
