Largan Precision Co (大立光), a major smartphone camera lens supplier to Apple Inc, might face limited earnings growth this year given the industry’s slow transition to higher-resolution lenses, Yuanta Securities Investment Consulting Co (元大投顧) Taipei-based analyst Jeff Pu (蒲得宇) said.
“With limited earnings upside and high market expectations, we continue to suggest investors take profit on the stock,” Pu wrote in a note to clients on Thursday last week.
Largan reported sales of NT$4 billion (US$127 million) for last month, up 66 percent year-on-year, but down 30 percent from December last year, falling below market expectations of a 20 percent decline month-on-month.
Pu said that Largan’s sales for last month came in below expectations due to lower demand for Apple iPhones, a smaller proportion of iPhone 6 Plus models in Largan’s shipment mix and weak demand from Chinese handset brands.
“February will be affected by fewer working days, and we don’t expect much of a recovery in March owing to the fast-falling number of iPhone [shipments],” said Pu, who maintained his “downgrade” rating on Largan shares and his price target of NT$2,650 for the stock.
Pu said that the camera specifications of the next-generation iPhone, dubbed iPhone 6S, will stay the same as the current iPhone 6 at 8-megapixels, limiting potential catalysts to push Largan’s stock price higher in the second half of the year.
Pu said that although the migration to 8-megapixel and 13-megapixel lenses would remain strong among Chinese vendors of mid-tier and low-end phones, upgrades to 16-megapixel and 20-megapixel lenses for flagship phones would be slow given the limited supply of CMOS sensors — used to convert light into electrons.
“On the other hand, we expect the specification migration in high-end models to be from new features, such as optical image stabilization and fast autofocus, which benefit module makers more than lens makers, in our view,” Pu said.
Data from Japanese research firm Techno Systems Research Co showed that Japan-based Sony Corp led the 2013 global CMOS image sensor market with a 33 percent share by sales value.
Sony, whose CMOS sensors are used in handsets made by Apple, Samsung Electronics Co Ltd and Huawei Technologies Co Ltd (華為), announced on Monday last week that it plans to increase its production capacity for stacked CMOS image sensors from its current level of about 60,000 wafers per month to about 80,000 wafers per month by the end of June next year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”