Young Fast Optical Co (洋華光電), a touch-panel supplier for Microsoft Corp and HTC Corp (宏達電), yesterday posted its first quarterly loss in a year due to sagging demand for tablets, but it said it expected revenue to improve this quarter on seasonal demand for handsets.
During the quarter ended on June 30, Young Fast swung into loss of NT$202 million (US$6.73 million), from net profit of NT$177 million in the first quarter. On an annual basis, the figure represented an improvement from a net loss of NT$390 million.
“The second quarter is a weak quarter. The company’s operation will improve gradually during the third quarter in line with the industry’s seasonal trend,” Young Fast chairman Lin Teh-jeng (林德錚) told investors.
Lin said Young Fast’s operations had bottomed out last month in terms of revenue and the company expected revenue to rise in the current quarter, compared with NT$1.96 billion last quarter.
Revenue grew 29 percent to NT$722 million last month from June’s NT$559 million, according to the company’s filing to the Taiwan Stock Exchange last week.
Handset touch panels represented 75 percent of Young Fast’s revenue last quarter and the share was likely to rise this quarter, Lin said.
However, the overall improvement this quarter would not be as significant when customers have revised downward their forecast for this year.
“We are being affected by weaker-than-expected market demand,” Lin said.
Young Fast’s sales growth forecast went against the sequential decline of between 15 percent and 20 percent estimated by bigger rival TPK Holding Co (宸鴻), which cited sagging demand for tablets and high-end smartphones.
“There is an oversupply of one-glass-solution (OGS) touch panels for PCs as demand fell short of expectations,” Lin said.
TPK supplies customers with OGS touch panels primarily for notebook computers.
“We are not affected by the oversupply. We are making thin-film based touch panels,” Lin said.
Young Fast planned to launch new medium-sized touch panels this quarter, he said.
Young Fast also said its cost-saving metal mesh touch panels have been used in notebooks available on the market now, in direct competition with OGS touch panels.
The company will maintain its capital spending at NT$2.5 billion for this year in contrast to TPK’s decision to slash this year’s equipment spending by nearly 16 percent.
Gross margin is expected to slide again this quarter from last quarter’s 11.7 percent because of intensifying competition, Lin said.
The figure was 13.3 percent in the first quarter.