The global political and economic landscape is shifting, as Shinkong Synthetic Fiber (1409) held its shareholder meeting today (27th). Chairman Wu Dong-sheng indicated that the challenges faced by businesses are greater than ever, with the impact of exchange rates even surpassing tariffs. The significant fluctuations in the US dollar and Japanese yen are placing immense pressure on operations.

Regarding the restoration progress of Shinkong Mitsukoshi in Taichung, Wu emphasized the need to resume operations as soon as possible, in line with city government arrangements, ensuring safety and thoroughness.

On energy policy and corporate competitiveness, Wu argued that Taiwan must consider diverse energy sources. Natural gas, coal, and even nuclear technology all have roles to play, but the potential risks of nuclear power cannot be overlooked, necessitating thorough discourse among government and society.

As pressures from de-globalization rise, Wu believes that companies must focus on diversifying markets and reducing exposure to the dollar. He remarked that the impact of exchange rates and shipping costs far exceeds that of tariffs, with international shipping costs increasing from under $1,500 per container to over $3,500, leading to high cost pressures for businesses.

Although the company already has natural hedges in place, they are considering reducing dollar holdings and seeking more stable hedging combinations, including alternative currencies like the euro. Additionally, he highlighted the importance of the yen, stating that although Japan is not the largest market, it remains one of the most stable sources of profit.

Looking toward future business opportunities, Wu noted that plastic materials are projected to be 20% of AI server components, and if demand grows, Shinkong's engineering plastics hold significant advantages for high-temperature applications. With developments in fiber optic packaging and connectors, opportunities in cooling materials using chemical fluids will open new avenues.

While the current market appears somewhat conservative, the overall supply chain has begun structural adjustments, and although customers are cautious, they have not halted new product development, but rather accelerated expectations for high-value materials.

Regarding the semiconductor special chemicals, Wu mentioned that several semiconductor clients have completed or are nearing completion of validation, with products starting small-scale shipments since May. This segment is expected to be an important new growth driver, with gradual volume increases in the second half of the year.

Another highlight is the partnership with Celanese to develop recyclable elastic fibers. Wu explained that traditional OP materials are not recyclable and pose environmental pressure. The new material provides elasticity functionality while enabling single material recycling and has the potential to completely replace current non-environmentally-friendly elastic fibers, with small-scale production expected to begin in July and expanded production planned for Q2 2026.

In terms of mid to long-term transformation strategy, Wu emphasized that the company plans to launch the InnoHub smart innovation park in May 2027, incorporating smart factories and startup incubators. This initiative aims to serve as a base for innovation and sustainable transformation for Shinkong Synthetic Fiber over the next 50 years, promoting diversification and new industry entry.

In summary, both Wu and General Manager Ou Jin-da noted that Taiwan's industry is rapidly transforming, with uncertainty and cost pressures present. However, advanced materials and green technology applications will be key to overcoming challenges.