Setting Sail Amidst Tariffs: Qisda's Ambitious Expansion Plans
Negotiations impact Q2 outcomes, as tensions linger: Qisda
By Meryl Kao / Staff reporter
In the throes of global trade tensions, Qisda Co (佳世達), a leading manufacturer of liquid-crystal displays and projectors, is well-positioned for success. Qisda's second-quarter revenue is projected to outshine the first quarter's impressive 6% year-on-year growth to NT$49.75 billion (US$1.64 billion), according to chairman Peter Chen (陳其宏) at an online earnings conference.
However, uncertain waters lie ahead. Although the company has weathered the 90-day tariff pause's end on July 8, US trade talks, geopolitical turmoil such as the India-Pakistan tensions, and a stronger New Taiwan dollar still cast a shadow over the coming months.
In response, Qisda is crafting a strategic play: establishing US-based factories to lessen the impact of US tariffs. This strategic move, as explained by Qisda president Joe Huang (黃漢州), includes possibly relocating artificial intelligence or industrial production lines to the US.
California, with its existing Qisda processing plants, serves as a strong foothold for this endeavor. Huang discussed expanding these facilities, potentially seeking another site if orders exceed capacity. Qisda's approach suggests a nimble and resilient response to the changing tariff landscape.
Pursuing natural hedging strategies and leveraging foreign exchange forward contracts, Qisda aims to safeguard itself against the NT dollar's rapid appreciation, a potential revenue-threatening factor in key business sectors.
Qisda's net profit in the first quarter soared 50 percent year-over-year to NT$594 million, driven in part by its highest-ever gross margin of 17.3 percent and a solid performance from its ICT segment, which contributed 7 percent more revenue year-over-year.
Looking ahead, the medical sector is poised to fuel Qisda's growth. Accounting for 14 percent of total revenue and ranking as a high-value-added sector, Qisda plans to invest heavily in this field to distinguish itself from competitors. With only 1 percent of medical sector revenue originating from the US, this sector offers untapped potential for revenue and profit growth in the coming quarters.
In the face of uncertainty, Qisda remains committed to maintaining revenue growth and striving for success by grasping opportunities and adapting to the ever-changing tariff environment.
- Qisda's planned relocation of some artificial intelligence or industrial production lines to the United States is likely a response to the potential impact of tariff fluctuations on their business.
- To safeguard itself against the NT dollar's rapid appreciation, Qisda is pursuing natural hedging strategies and leveraging foreign exchange forward contracts.
- The medical sector, which already contributes 14 percent of Qisda's total revenue and is a high-value-added sector, is poised to fuel Qisda's growth, offering untapped potential for revenue and profit growth in the coming quarters, particularly in regions where Qisda currently has a minimal presence, such as the United States.
