Wed, Mar 12, 2014 - Page 14 News List

Elan revenue decline raises concern

By Lisa Wang  /  Staff reporter

Elan Microelectronics Corp (義隆), which makes controller chips used in PC and smartphone touchpanels, yesterday posted an 11 percent decline in revenue for last month on seasonal weak demand, casting uncertainty over the firm’s ability to hit its revenue goal this quarter.

Revenue fell to NT$502 million (US$16.56 million) last month, compared with NT$563.19 million in January, hitting the lowest level in two years.

That was a 5 percent annual contraction from NT$528.72 million.

In the first two months, Elan posted NT$1.07 billion in revenue, achieving 63 percent of the company’s revenue forecast of NT$1.7 billion for this quarter.

“This result was in line with our latest expectation of NT$500 million,” Deutsche Bank analyst Jessica Chang (張幸宜) said in a research note released yesterday.

Chang expected Elan’s revenue to grow from this month on a pickup in demand for touchpanels.

Elan has to make revenue ranging between NT$617 million and NT$635 million this month to reach the company’s revenue goal, which Chang said could be a challenge, because “sales momentum for March is somewhat capped by slightly insufficient inventories on touch IC products.”

Elan told investors last month that it aimed to supply touch drivers ICs for smartphone panels this quarter to Japanese and South Korean brands.

Chang retained her “buy” rating on Elan with 12-month target price set at NT$69, implying an upside of about 27 percent from Elan’s closing price of NT$54.4 yesterday.

Another touchpanel controller chipmaker, FocalTech Corp (敦泰), saw revenue drop 12 percent to NT$320 million last month from NT$358 million in January, but the figure advanced 49 percent year-on-year from NT$215 million.

Cumulative sales from January and last month expanded 10 percent year-on-year to NT$678 million.

FocalTech indicated it would stick to its full-year shipment target of 300 million units for this year, which would represent 50 percent growth from last year’s 200 million units.

Shares of FocalTech rallied 6.99 percent to NT$275.5 yesterday.

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