TECH China's chip giant says Olympic losses are a drop in the ocean

TECH

China's chip giant says Olympic losses are a drop in the ocean

Global Times

07:27, March 29, 2020

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A worker of HC Semitek, a leading Chinese LED chip maker, produces chips at its subsidiary in Yiwu in East China's Zhejiang Province. (Photo: GT)

China's second-largest LED chip maker HC Semitek says it lost a handful of orders due to the postponement of the Tokyo Olympics, but that the loss was almost nothing compared to its generally good business situation amid the novel coronavirus (COVID-19) pandemic.
Most lost orders were for large LED screens at Olympic venues in Japan, said Zhou Fuyun, chairman of a HC Semitek subsidiary in Yiwu, East China's Zhejiang Province. One recently canceled order from a domestic screen producer was worth 5 million yuan ($707,514).
"Nonetheless, these [Olympics-related] orders are not big losses to us as they only account for a very small part of our business," Zhou told the Global Times Thursday.
The LED chip giant is shifting from making lamp and lantern chips to producing chips for electronic product panels like those used in smartphones and tablets, whose markets have been less hit by the virus than human-contact products.
HC Semitek and San'an Optoelectronics, another leading Chinese LED chip maker, together provide 50 percent to 60 percent of the world's electronic product panel chips, Zhou said. "Our goal is to increase that proportion to nearly 70 percent this year."
The global spread of the virus has not largely affected HC Semitek, with its current production capacity almost level with last year. Few of its major chip purchasers including South Korea's LG and Samsung have canceled orders due to the virus outbreak, Zhou said.
The company's Yiwu subsidiary has even recruited some 300 employees during the pandemic, bringing its employee count to 1,500. It resumed work on February 10.
Local government has offered the company millions of yuan in tax and social insurance exemptions to encourage production amid the pandemic, Zhou said.
The upstream chip industry is affected by the virus later than downstream industries like display screens or panels, he said. "Taking the production cycle into account, months may have passed by the time a decrease in market demand occurs because of the pandemic."
The pandemic will end regardless and orders will be back sooner or later, said Zhou. "At least, for now, I'm confident about the future."

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