Flat sales in the H2 of Nexcom due to global uncertainties
Nexcom Navigates Global Challenges While Preparing for Robotics Growth
In the ever-changing landscape of global business, Nexcom International Co is adapting to a variety of challenges while preparing for the future.
Amidst global uncertainties over potential US tariffs, customers of Nexcom have taken a wait-and-see attitude. However, the company's revenue for the first half of 2021 showed a 34.73% year-on-year increase, amounting to NT$3.133 billion (US$106.6 million).
One of the factors contributing to this growth is the success of Nexcom's robotics subsidiary, NexCOBOT. Integration testing and safety certification for NexCOBOT's robot module are currently underway, with sample shipments scheduled for the fourth quarter. The company expects to deliver small-volume orders of 100 to 200 units of the product per month in the first half of next year, with mass production likely in the second half.
NexCOBOT is collaborating with Nvidia Corp to integrate its first-generation artificial intelligence (AI) model into its robotics module, and is developing a second-generation system with Nvidia, with the new module set to be unveiled next month. The company is also in discussions with Japanese robot module makers for new projects.
However, the sharp appreciation of the New Taiwan dollar against the US dollar has affected Nexcom's second-quarter performance more than US tariffs. Each NT$1 gain in the New Taiwan dollar cuts Nexcom's gross margin by 5 percentage points due to holding receivables in tens of millions of US dollars. To offset foreign-exchange losses, Nexcom raised prices for small and medium-sized clients, but could not immediately adjust pricing for larger clients due to long-term contracts.
The company has not used hedging tools for foreign-exchange risks due to unpredictable market and global economic fluctuations. Nexcom is not considering building new plants in the US or Southeast Asia as it has not felt significant pressure, and information technology products typically face zero tariffs.
Despite these challenges, Nexcom International Co expects flat revenue growth in the second half of 2022 due to geopolitical uncertainties and foreign-exchange fluctuations. The gross margin for robotic motion controllers is typically higher than those for industrial computers, promising significant earnings growth for Nexcom after mass production begins.
NexCOBOT is also developing a functional safety robot joint module with Synapticon GmbH, demonstrating the company's commitment to innovation and growth in the robotics and AI sector.
The technology sector, including companies like Nexcom, faces several potential challenges in the coming months. These include global supply chain disruptions, trade tensions and tariffs, cybersecurity and data privacy concerns, and economic instability. However, the specific impacts on Nexcom's revenue in the second half of 2021 would require more detailed company-specific information.
- In the technology sector, Nexcom International Co is preparing for growth in the robotics industry, a move that could boost its overall performance.
- The company's collaboration with industry leaders like Nvidia Corp in finance and Synapticon GmbH underscores its commitment to innovation and growth in the field of robotics and artificial intelligence.
