TPK Holding Co (TPK, 宸鴻), which supplies touch panels for Apple Inc’s Apple Watches and iPads, yesterday posted quarterly losses of NT$618 million (US$19.6 million) for last quarter due to seasonally weak demand, an inventory glut, and customers’ product transitions.
TPK lost NT$1.01 billion in the first quarter. Gross margin fell to 2.1 percent last quarter from 6.5 percent in the second quarter because of a decline in factory utilization, the company said.
TPK said it expected business to pick up this quarter.
TPK chief executive officer Michael Chung (鍾依華) said the company is optimistic about demand for touch sensors, applications for the company’s open-cell touch display solution, fingerprint sensors, curved displays and new devices running on Microsoft’s new operating system Windows 10.
“We believe that pressure sensors [for force touchpanels] will see widespread adoption across the mobile-device market this year,” Chung said.
TPK’s revenue this quarter is expected to grow by 50 percent from last quarter’s NT$23.7 billion, Chung said, adding that gross margin is set to improve to between 2 percent and 6 percent.
TPK is scheduled to begin shipping pressure sensors in the second half and expects the volume to grow significantly next year.
TPK’s forecast of strong growth this quarter contrasts with the outlook for the touchpanel industry as a whole, which Chung expects to remain stagnant due to a lack of game-changing apps and products in the mobile-device market.
TPK said the company’s operating costs shrank to NT$1.62 billion last quarter from the NT$1.81 billion in the first quarter due to organizational restructuring.
Referring to the high expectations for a certain smart watch, Chung said that the wearable device market is still in its infancy in terms of ecosystem and applications, but he is optimistic on the growth potential of the segment, adding that the first-generation iPhone also had a slow start.
Chung said that apart from telling the time and fitness applications such as heart rate monitoring, uses for smart watches might expand to unlocking electronic doors, payment processing and personal security monitoring for children and the disabled.
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