Fri, May 20, 2011 - Page 12 News List

G-Tech quintupling capital spending to NT$5 billion

By Lisa Wang  /  Staff Reporter

G-Tech Optoelectronics Corp (正達國際), which makes cover glasses used in touch-panel displays, planned to expand its capital spending fivefold to NT$5 billion (US$173.4 million) on expanding capacity to meet voracious demand for Apple Inc’s iPhones and iPads, a company executive said.

Last year, the Miaoli-based company allocated NT$1 billion to new equipment, G-Tech spokesman Tony Chiu (邱火生) said.

G-Tech, which is nearly 43 percent owned by electronic service provider Hon Hai Precision Industry Co (鴻海精密) via its subsidiaries, primarily makes cover glass and indium tin oxide (ITO) glass used in touch panels for tablet devices. Hon Hai makes iPhones and iPads for Apple.

In recent months, there has been speculation that G-Tech might be involved in a major restructuring plan under close study by the nation’s top LCD panel maker, Chimei Innolux Corp (奇美電子).

Chimei, an LCD manufacturing arm of Hon Hai, is considering spinning off its handset and tablet manufacturing business unit to create a new entity. However, the plan seems to be in limbo now.

Solid demand for its cover glass and ITO glass has helped revenues grow more than fourfold year-on-year, or 20.59 percent month-on-month, to NT$574 million last month.

“Business looks quite good. Revenues in April and May will be higher [than in previous months],” G-Tech vice president Jason Huang (黃敏書) told reporters on the sidelines of a seminar arranged by Topology Research Institute (拓墣產業研究所) on Wednesday.

To cope with customer demand, G-Tech plans to boost capacity of cover glasses from 600,000 units to 3 million units a month, mostly from its Chinese factories, by the end of this year, Huang said.

G-Tech produces less than 1 million units of ITO glass at a 4.5-generation plant, Huang said, without specifying the exact figure. He added that the company has no plan to expand that capacity this year.

Shipments of tablet devices, which are equipped with touch screens, are expected to more than triple to 51 million units this year from 16.7 million last year, Topology forecast.

Topology forecast that about 85 percent of the 388 million smartphones shipped this year would be outfitted with touch screens, up from 76 percent last year.

G-Tech’s stocks rose 1.7 percent yesterday to NT$116.5 on the Emerging Stock Market.

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