Falling exchange rates hit Taiwan-based manufacturers

Falling exchange rates hit Taiwan-based manufacturers

March 5, 2016

Internet communication device makers in Taiwan are expecting revenue falls of 1-3% due to the exchange rate of NT$ to US$ increasing to $30.95. The impact of the rise on profits is not yet clear.

According to D-Link, every one cent increase in the rate of NT dollars leads to a 0.3% affect on revenues. As the NT dollar has recently gained three cents, then the company’s revenues should have taken a 0.9% hit. However, D-Link took shifting exchange rates into account when it made its projections for the first quarter, so the company is confident that it will not suffer losses due to changes in the exchange rate.

Gemtek Technology say that their revenues will be affected by around 3%. The affect on profits depends on exchange rates at a later time. However, the company expects that its gross margin for the first quarter will maintain the levels of the previous quarter.

Gemtek also pointed out that although the fall in exchange rate has put pressure on its revenues, client demands to drop pricing have eased somewhat after negotiations over the falling exchange rate.

Cameo Communications have yet to make any predictions for their first quarter performance. Due to the heavy snows in China, the company had to delay a number of January shipments into February, so it is expected that February’s revenues will surpass January’s NT$835 million (US$27.02 million), and may even reach NT$900 million.

Tim Yeo

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