Record-setting Gross Margin Achieved by Comal after 15 years
Unleashing the Future: A Look at Compal Electronics and Pegatron's Journey
Compal Electronics
Things are looking rosy for Compal Electronics, one of the notable players in the electronics manufacturing services (EMS) sector. Despite the industry-wide pressure on gross margins due to fluctuating costs and competition, Compal managed to notch up an impressive 5.2% gross margin in Q1 2025 - a feat unseen in nearly 15 years! How did they do it?
Well, according to Compal, their secret sauce includes a better product mix and reduced dependency on low-margin businesses. Their efforts seem to be paying off; non-PC products like mobile phones, wearable devices, and servers now account for 30% of their quarterly revenue - a significant increase compared to the previous quarter and the year before.
The future seems bright for Compal, with the EMS market projected to expand significantly by 2032. Moreover, despite weak seasonality, Compal's Q1 revenue remained stable compared to the same period in 2024.
Pegatron
Pegatron, another key player in the EMS industry, had a stellar Q1 2025. They reported a massive 32.1% year-on-year increase in Q1 net profit, despite a decline in their core business. A significant chunk of this growth can be attributed to non-operating gains in the quarter.
In 2024, Pegatron faced a 10.46% decline in revenue but still managed a 7.41% increase in earnings. It's clear Pegatron is sailing through challenging times, thanks in part to strategic moves like diversifying into automotive electronics - a growing segment of their business.
Looking ahead, Pegatron expects to see a "low-teen percentage point" increase in notebook computer shipments this quarter, helped by front-loading demand from clients. However, they anticipate weaker sales in communications devices due to seasonal factors and slightly increased sales in consumer electronics. Pegatron might also start shipping server-related products in small volumes this quarter, with more growth expected next quarter.
Whew! That's a lot of numbers and trends, but one thing's for sure: both Compal Electronics and Pegatron are boldly charging into the future, ready to conquer the challenges and opportunities the EMS market has to offer.
In the realm of finance and business, both Compal Electronics and Pegatron, key players in the technology-driven electronics manufacturing services (EMS) sector, are stirring up excitement with their recent performance. Compal, for instance, achieved an impressive 5.2% gross margin in Q1 2025, largely due to a better product mix and reduced dependency on low-margin businesses, thus diversifying into new technology segments like mobile phones, wearable devices, and servers. On the other hand, Pegatron's Q1 2025 net profit skyrocketed by 32.1% year-on-year, attributable in part to strategic diversification into automotive electronics, a growing technology segment in the EMS industry.
