Wed, Feb 19, 2014 - Page 13 News List

Elan net profit up 12% on demand for driver ICs

KEEPING IN TOUCH:The firm’s shipments of driver ICs for touch-screen products grew 12.2%, and it is set to mass-produce them for use in wearable devices this year

By Helen Ku  /  Staff reporter

Elan Microelectronics Corp (義隆) yesterday reported that its net profit grew 25 percent quarter-on-quarter and 12 percent year-on-year to NT$346 million (US$11.43 million) last quarter on the back of rising demand for driver ICs used in smartphones and notebook touchpads.

Thanks to new orders from clients — including Japan’s Sony Corp and China’s Alibaba Group Holding Ltd (阿里巴巴) — Elan shipped 4.54 million touch-screen driver ICs used in smartphones last quarter, up 50 percent from 3.02 million units in the previous quarter.

In contrast, shipments of touch-screen driver ICs used in tablets dropped 87 percent sequentially to 493,000 units last quarter, while those of touch-screen driver ICs used in notebooks declined 1 percent to 2.37 million units last quarter, the firm’s financial report showed.

Shipments of touchpad ICs for notebooks — which are the company’s major revenue source — increased 11 percent sequentially to 10.82 million units last quarter.

Supported by the 12.2 percent expansion in shipments of driver ICs for touch-screen products, net profit last year reached a record-high NT$1.46 billion, or earnings per share of NT$3.8, the report showed.

“We are set to mass produce driver ICs used in wearable devices and Chromebooks from this year,” Elan chairman Yeh I-hau (葉儀皓) told an investors’ conference.

Elan is likely to start supplying driver ICs used in smartglasses and smartwatches, and touchpad ICs for Chromebooks next quarter, Yeh said.

However, he declined to confirm if Google Inc — the developer of Google Glass — is one of its customers, saying only that top-tier PC brands, including Lenovo Group Ltd (聯想), Hewlett-Packard Co (HP), Acer Inc (宏碁) and Asustek Computer Inc (華碩), are among its major clients for touchpad ICs.

“We expect the penetration rate of touch-enabled notebooks to increase to at least 20 percent this year from 12 percent last year, but it depends on whether two-in-one detachable notebooks can create huge market demand,” Yeh said.

“Elan’s product-mix diversification plan is designed to catch changing market trends and avoid over-reliance on the touch notebook market,” he added.

After a sampling phase, Elan will start mass producing driver ICs designed for fingerprint sensors for smartphones or tablets, Yeh said, adding that the earliest possible timing for the company’s “next big project” is in the third quarter of the year.

For this quarter, Elan forecast that sales would drop between 9.18 percent and 14.52 percent sequentially to between NT$1.6 billion and NT$1.7 billion due to seasonal factors.

Gross margin is expected to improve to between 44 percent to 46 percent this quarter from 44 percent last quarter, while operating margin is estimated to stay between 15 percent and 17 percent, compared with last quarter’s 16 percent.

Elan’s capital expenditure is expected to stay at the same level as NT$1.9 billion as that of last year, the company said.

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