FocalTech Systems Co Ltd (敦泰科技), which controls a 50 percent share of China’s touch controller chip market, yesterday said that a non-operating income windfall had propelled a threefold surge in pre-tax income for last quarter, despite losses incurred by its core business during the period.
The company attributed last quarter’s operating loss of NT$49 million (US$1.49 million) to contracting sales, which fell 9.43 percent sequentially from NT$3.2 billion the previous quarter to NT$2.9 billion.
Non-operating activities, such as foreign exchange hedging and bond investments, netted gains of NT$235 million last quarter, resulting in pre-tax profit of NT$186 million, or earnings per share of NT$0.49, compared with NT$56 million, or NT$0.15 per share, in the previous quarter.
“The operating loss last quarter was the direct result of reduced sales, which coincided with our efforts to cut shipments of low margin products, and a short-term imbalance of supply and demand for high-end products,” FocalTech chairman Genda Hu (胡正大) told an investors’ conference.
Operating losses totaled NT$166 million in the January-to-September period, company data showed.
As of the end of the third quarter, shipments of touch controllers and LCD drivers reached 500 million units, of which about 85 percent were for smartphones, Hu said.
Hu forecast better smartphone demand this quarter, as clients ramp up procurement ahead of the year-end high season.
The company yesterday said that a Chinese smartphone maker has adopted FocalTech’s new integrated driver and controller (IDC) solution, which requires only a single IC to drive a display and allows manufacturers to design devices with smaller form factors and save on material costs, Hu said.
The IDC is to support resolutions ranging from 1080p to ultra-high-definition on devices ranging from smartphones to tablets, he added.
FocalTech will not be absent from the anticipated demand for 3D touch-enabled mobile devices such as Apple Inc’s Apple Watch and iPhone 6S, Hu said.
The company’s pressure-sensitive touch-screen solution has entered the design phase with its clients, and is to go into production in the first half of next year, he said.
The company is also to introduce its new generation of fingerprint sensors later this quarter.
“We are behind our competitors in this niche, but we are trying to catch up,” Hu said.
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