Thu, Feb 24, 2011 - Page 12 News List

TPK boosts spending to raise capacity

TOUCHING:Although the touch-screen maker expects revenue to drop this quarter, it is going ahead with plans to increase its capacity for sensors and other back-end products

By Amy Su  /  Staff reporter

TPK Holding Co (宸鴻), a supplier of touch-screens for Apple Inc’s iPhone and iPad tablet computer, yesterday said it planned to boost capacity by doubling spending this year as growth in portable devices drives up demand for touch screens.

The company expects to spend NT$20.3 billion (US$686.5 million) this year, compared with NT$9.4 billion last year, to increase capacity on back-end products including cover glass, touch sensors and lamination, TPK Holding told a investor’s conference yesterday.

“TPK Holding will increase competitive strength by focusing on back-end technologies and capacity, which help the company to reach the level of vertical integration,” president Tom Sun (孫大明) said.

However, the company expects revenue to drop by 10 percent to 15 percent from the previous quarter because of seasonal weakness and a higher base in the fourth quarter, when it posted NT$26.8 billion in sales for the quarter.

The company’s performance in the fourth quarter beat market expectations as revenue grew 406 percent year-on-year, while net income reached NT$2.17 billion, up 179 percent from NT$776 million a year earlier, with earnings per shares of NT$10.51, according to the company’s financial statement.

“The better-than-expected results in the fourth quarter came from higher yield rates and rising capacity of self-made touch sensors,” Sun said.

Sun said the company’s yield rates were higher than its peer competitors in the fourth quarter, but he declined to release specific figures.

TPK Holding kept to its plan to boost touch sensor capacity in the fourth quarter, as self-made touch sensors better match its own touch panel products, helping the company pursue higher profitability with lower costs, Sun said.

The company’s self-made touch sensors accounted for more than 30 percent of its total small-sized touch panel shipments in the fourth quarter, while the self-made touch sensors totaled more than 40 percent of its large-sized touch panel products, spokesman Freddie Liu (劉詩亮) said.

The company will increase its capacity in self-made touch sensors, but it hasn’t drawn up a schedule yet, Liu said.

The rising capacity of touch sensors also belongs to TPK Holding’s vertical integration strategy, which will help keep its gross margin in a satisfactory range of more than 15 percent, he said.

Gross margin in the fourth quarter reached 16.4 percent, better than the third quarter’s 14.3 percent, company data showed.

For the whole of last year, total revenue climbed 219 percent year-on-year to NT$59.6 billion, while net income increased 105 percent year-on-year to NT$4.7 billion, with earnings per shares of NT$23.03, the company’s financial statement showed.

TPK Holding debuted its shares on the Taiwan Stock Exchange on Oct. 29 with an initial public offering price of NT$220. The stock — which reached a session-high of NT$749 on Dec. 19 — was down 1.76 percent to close at NT$727 yesterday, Taiwan Stock Exchange data showed.

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