Hon Hai Ends 2016 on High
Hon Hai Precision Industry Co. (also known as Foxconn) reported its full-year results on April 1, disclosing that the world’s largest contract manufacture of electronics saw record high earnings in 2016 of NT$148.66 billion (US$4.9 billion), up 1.22% from last year. Mirroring Taiwan’s overall exports, Hon Hai had been slumping for the first three quarters of 2016 before a surging Q4 made up for the previous disappointing results and propelled Hon Hai to its new high.
TSMC Misses Revenue Goals
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry chipmaker, missed its first quarter guidance by NT$6 billion (US$196.7 million) on a stronger than expected NT dollar, according to media reports on April 11. TSMC’s posted Q1 consolidated revenue came to NT$233.91 billion, lower than the projected range of NT$236 billion to NT$239 billion. Q1 revenue was up 14% in annual comparisons, though it saw a quarterly decline of 10.79%. TSMC blamed the strength of the NT dollar for the miss, saying that the 2% rise in value, from NT$32/US$1 to NT$31.16/US$1 caught the firm by surprise. This was the biggest shortfall in sales against analysts’ forecasts since the financial crisis of 2008-2009. TSMC is one of Taiwan’s largest companies and is considered vital to the health of the overall economy. Despite the missed guidance, analysts remain bullish on TSMC.
Biotech Struggles for Profitability
The struggles of two of Taiwan’s most renowned pharmaceuticals firms points to the risks involved in biomedical research. TaiGen Biopharmaceuticals Holding Ltd., founded in 2001 with the help of the National Development Fund (NDF), announced on April 18 that it had received 137 million RMB (US$19.9 million) from China’s YiChang HEC ChangJiang Pharmaceutical Ltd. to jointly develop a new treatment for chronic hepatitis C. The announcement was reportedly to allay investor concerns that the firm would soon lose funding from the NDF, which is reportedly seeking to exit its earlier investments in order to free up funds for investments in new firms and technologies.
Another firm that likewise was fostered by the NDF, TaiMed Biologics Inc., has recently begun to book sales of its breakthrough HIV medication, Ibalizumab, but nevertheless analysts remain skeptical that the firm can deliver a profit in the near future. Ibalizumab has recently been approved under the U.S. “fast track” process, yet analysts express concern that its high price – US$60,000 per patient per year – will greatly limit its market. Further, the launch of the drug will likely be delayed in Europe due to the lack of fast track approval.