CORONAVIRUS/Walsin Technology's Malaysia plant down temporarily; shares lower

11/25/2020 12:42 PM
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Walsin Technology
Walsin Technology's shareholder meeting on June 15. CNA file photo

Taipei, Nov. 25 (CNA) Shares of Walsin Technology Corp., a leading Taiwanese passive component supplier, tumbled Wednesday morning after the company said it was suspending production at its Malaysia factory because of a COVID-19 outbreak among its workers.

The suspension led to concerns that customers will shift their orders to Walsin Technology rivals such as Yageo Corp., dealers said.

As of 11:52 a.m., Walsin Technology had fallen 3.39 percent to NT$185.00 (US$6.49) on the Taiwan Stock Exchange, where the benchmark weighed index was down 0.53 percent at 13,742,23 after coming off a high of 13,893.20 on profit-taking.

The stock came under pressure soon after the market opened because of the announcement of the plant suspension Tuesday, when the company said COVID-19 had spread among its workers.

Walsin Technology did not provide details on how many of its employees had COVID-19 at the plant, located in Ipoh about 180 kilometers north of Kuala Lumpur, but it said it was screening all of its employees and would apply to authorities in Malaysia to resume production depending on the test results.

In Malaysia, where many Taiwanese manufacturers have factories, 58,847 confirmed COVID-19 cased were reported as of Wednesday and 341 people had died from the disease, according to the Coronavirus Research Center of Johns Hopkins University.

Foreign brokerages said Walsin Technology's plant in Malaysia specializes in chip resistors used in automotive electronic devices and high-end power management chip production.

Because global demand for chip resistors remains solid, analysts expected Yageo will benefit from the production suspension at the Malaysia plant.

According to market estimates, Walsin Technology accounts for 22 percent of the global chip resistor market, while Yageo has the biggest share in the world at 34 percent.

Walsin Technology has told its clients, however, that its plants in Taiwan, Japan and China will fill the void created by the suspension of production in Malaysia, and the suspension should not have a material impact on its supply of components, local media reported.

(By Chang Chien-chung, Chung Jung-feng and Frances Huang)

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