Networking device maker Hitron Technologies, in response to North America-based clients' demand, is moving production capacity from China to Vietnam, which will become its main production base after second-quarter 2021, according to company chairman and president Davis Cheng.

In the wake of the US-China trade disputes, Hitron began constructing a factory in Vietnam in 2019 and started production there in July 2020. The factory has monthly production capacity of 400,000 cable modems currently, with the capacity to expand to 800,000 units in 2023.

The global cable modem market is expected to amount to 40-50 million units in 2020 and Hitron expects to ship six million units to become the third largest supplier, Cheng said. Networking/communication device maker Alpha Networks holds a 60.79% stake in Hitron, which will leverage the former's manufacturing capability to increase annual shipments to 10 million cable modems in two years, Cheng noted.

However, competition has intensifed in the global market, which is likely to lead to price wars and force US and European makers out of the market, Chen indicated.

Hitron has received orders for Wi-Fi 5 and 6 gateways and routers from the US and Canada since second-quarter 2020, with shipments scheduled until third-quarter 2021, Cheng said, adding that Hitron has passed certification for newly developed Wi-Fi 6 cable gateways.

Hitron in 2012 spun off its system integration business unit as a subsidiary - Interactive Digital Technologies (IDT) - which provides system integration services. As construction of 5G infrastructure in Taiwan takes off, 5G-related business will become IDT's operational focus over the next 2-3 years.

Hitron posted consolidated revenues of NT$3.009 billion (US$104 million), gross margin of 18.42% and net profit of NT$92.1 million for third-quarter 2020, leading to consolidated revenues of NT$7.003 billion, gross margin of 21.36% and net profit of NT$173.9 million January-September. The company's consolidated revenues of NT$767.4 million for October dipped 30.44% sequentially and 15.35% on year.

Hitron chairman and president Davis Cheng
Photo: Aaron Lee, Digitimes, November 2020