Chunghwa Picture Tubes Ltd (CPT, 中華映管) saw its quarterly profits improve this quarter from the last due to higher prices, as seasonal demand for handset and car displays added to supply constraints.
The world’s No. 3 car display supplier said it has raised panel prices by a double-digit percentage this quarter from a quarter earlier and expects another 5 percent hike next quarter, as demand is expected to continue exceeding supply.
“All of our factories are fully utilized, but we still cannot fully meet demand from customers, as this quarter is a peak season for consumer electronics and the auto industry,” Ryan Chung (鍾兆其), vice president of CPT’s sales and marketing center, told reporters on the sidelines of the Touch Taiwan Display show at the Taipei World Trade Center Nangang Exhibition Hall.
Photo: CNA
As new smartphone displays with 18:9 aspect ratio rapidly gain traction, the company can only deliver 80 percent of customers’ orders, Chung said.
“We are expecting the growth momentum to last through the end of this year,” Chung said.
As the LCD industry is becoming healthier and less volatile, CPT is confident that profits this quarter will be better than last quarter, he said.
Next quarter will be even stronger than this quarter, Chung added.
The Taoyuan-based company posted its fourth profitable quarter in a row last quarter, with net income reaching NT$1.16 billion (US$38.4 million), more than tripling from NT$283 million a year earlier.
Chung attributed the increase to the company’s efforts to diversify its product portfolio to the higher-margin displays used in cars and industrial devices.
Combined revenue contribution from cars and industrial devices would climb to 35 percent of CPT’s total revenue this year, compared with 25 percent last year, Chung said.
“We have greater exposure to Japanese and Chinese car brands. One in three Chinese brand cars is equipped with CPT displays,” he said. “We are trying to break into European and US car brands.”
CPT, which holds 16 percent of the global car display market, said it aims to expand car display revenue to more than 50 percent of its total revenue in three years, given that more and bigger LCD panels are to be installed in the dashboards and central information displays of cars.
The revenue share is expected to grow to between 60 and 70 percent in the next five years, Chung said.
Separately, E Ink Holdings Inc (元太科技), which supplies e-paper displays for Amazon.com’s Kindle series, is also planning to diversify its product portfolio to boost profitability.
E-paper displays used in e-readers is the biggest revenue source for the company, making up 70 percent of its total revenue last quarter, after exiting the LCD market earlier this year.
“We are seeking to apply e-paper displays to more applications,” E Ink chairman Frank Ko (柯富仁) told a media briefing in Taipei. “We are trying to bring our e-paper displays to more Internet-of-Things devices.”
E Ink has seen an increasing number of retailers, hypermarkets and e-commerce operators willing to adopt electronic shelf labels to replace paper labels, given the former’s relatively lower costs and higher efficiency, Ko said.
As a result, shipments of electronic shelf labels are expected to grow by 20 to 30 percent annually this year from last, he said.
E Ink said it has also made progress in promoting its e-paper displays for use in “smart” credit cards, point-collection cards and public transportation cards.
The new applications would become the company’s new growth drivers, Ko said.
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