The demand for vehicle and power supply-related diodes has surged, driving up prices across the industry. Hongyang Development Technology-KY has raised its pricing by 7% to 10% for high-demand products in the first quarter of this year. The company has strategically focused on the automotive market, particularly in vehicle rectifier components. Its LED taillights are already being used by major car manufacturers such as Honda, Ford, and Renault in India. As production ramps up, the company expects shipments to grow steadily, with a target of having automotive diodes contribute 10% of its total revenue by 2020.
With raw material prices skyrocketing and global semiconductor manufacturers consolidating, the diode market has faced shortages since late last year. Taiwanese companies like Dimension Mao, Hongyang-KY, and Dewei have gradually increased their quotations, with some hikes reaching around 10%. Hongyang-KY specifically saw a 7% to 10% price increase in the first quarter of this year, reflecting the tight supply situation.
In the fourth quarter of last year, Hongyang-KY acquired 70% of Baofeng Electronics, a company specializing in 3- and 4-inch wafer production. This acquisition strengthens Hongyang’s wafer processing capabilities, supporting its R&D efforts. The integration of the two companies allows Hongyang to complete its full wafer process chain, giving it a competitive edge. Despite the current shortage of silicon wafers, the company believes that the supply will remain stable in the first half of the year. Its goal is to achieve a monthly profit in the second half of 2024.
After expanding into the solar diode sector, Hongyang-KY has actively entered the automotive market. It now offers a wide range of in-vehicle electronic systems, including driving recorders, reverse assist displays, tire pressure monitoring, vehicle audio/video systems, advanced lighting, charging, air conditioning control, and digital instrument panels. Last year, the company completed dozens of products that passed the AEC-Q101 self-declaration process, gaining traction in the market. Its rectifying components have been adopted by major automakers such as Chrysler in the U.S., and Daewoo and Hyundai in South Korea. In terms of LED taillights, they are already used in Indian vehicles from Honda, Ford, Renault, and TATA. The company anticipates a steady increase in automotive product shipments this year, with the long-term goal of making automotive diodes account for 10% of its revenue by 2020.
Hongyang-KY reported consolidated revenue of 2.085 billion yuan in the previous year, marking a 7.25% annual growth. Although the company initially estimated that its profit would remain similar to the previous year, it now sees strong potential for this year. With ongoing adjustments and improvements, the company is aiming to outperform last year's results.
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