New MLCC plant in Tianjin won’t be ready in 2H: Samsung

Samsung Electro-Mechanic has said it won’t be readily rolling out MLCC units this year as its new plant in Tianjin of China will unlikely be ready to go by the latter half of this year as planned, while its operations in Southeast Asia have also been crippled.

In a conference call on its first quarter earnings, the company’s key executive Bae Gwang-ok said due to the Chinese government’s policies in the aftermath of the coronavirus, it has been forced to stop putting the finishing touches on the new MLCC plant in Tianjin.

“We will share the details as soon as we know exactly when the plant can start running,” Bae added. Samsung Electro-Mechanics had been building the new plant in aim to increase the revenues generated by its automobile MLCC sector.

Bae also said the spread of the virus is also causing setbacks at its MLCC plant in the Philippines. “Less than half of our Filipino workforce are reporting for duty on account of government orders,” he said.

As a result, the company’s MLCC plant operating rate is expected to fall short of 80% in the second quarter of this year. The company is hoping to compensate as much as possible by depleting inventory and raising the operating rate at its plant in Busan.

This comes as demand is seen to increase in Q2 on account of more companies and schools adopting online training and education.

In the first quarter of this year, Samsung Electro-Mechanics’ sales grew 8% YoY to KRW 2.22 trillion, while its operating profit fell 32% to KRW 164.6 billion – partially due to changing exchange rates.

The Elec is South Korea’s No.1 tech news platform.