FocalTech Systems Co Ltd (敦泰科技), which has a 40 percent share of China’s touch controller chip market, yesterday reported a net profit of NT$62.6 million (US$1.97 million) for last quarter on improving customer demand, ending three quarters of losses.
The company lost NT$54.25 million in the first quarter of this year.
FocalTech expects the growth momentum to extend into this quarter, driven by rising shipments of its new high-margin chips.
Revenue is expected to grow slightly this quarter from last quarter’s NT$2.43 billion, the company said.
“We think business will pick up in August and September, bringing the third quarter above the second quarter,” FocalTech chairman Genda Hu (胡正大) said. “We are confident that the second half will be better than the first half.”
Hu’s optimism is due to sales of the company’s new products, which are boosting average selling prices and offsetting weakness in the Chinese market. Hu expects handset sales in China to be flat this year from last year.
FocalTech plans to ship its first chip that integrates an LCD driver and a touch controller this quarter and to ship its first fingerprint sensor within six months. The integrated chip would be a world first, the company said.
In addition to developing new products, FocalTech is also diversifying its customer portfolio to reduce operational risk, Hu said.
South Korea’s LG Display Co, Japan’s Sharp Corp and US action camera maker GoPro Inc are among FocalTech’s new clients, the company said.
Hu said FocalTech is the exclusive chip supplier to GoPro for its action camera and its new camera that can be installed on a plane.
Gross margin would trend up in the second half from last quarter’s 16.8 percent, helped by greater revenue contribution from higher-margin chips such as high-definition driver chips for flat panels, the company said.
The company expects high-definition controller chips to account for more than 60 percent of the company’s LCD driver chip revenue, from last quarter’s 50 percent, while higher-priced mutual-capacitive touch controller chips are set to make up more than 40 percent of total touch controller chip revenue this quarter, from about 40 percent last quarter.
Hu said the company could buy FocalTech stock to help support the share price.
“FocalTech shares are undervalued,” Hu said. “The board is discussing the possibility of launching a share buyback program.”
FocalTech shares rallied 9.8 percent to close at NT$21.85 in Taipei trading yesterday, but the price is still well below the company’s net value per share of NT$29.56 on March 31.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to