Touchpanel controller supplier FocalTech Systems Co Ltd (敦泰科技) yesterday said that its net profit grew 3.3-fold last quarter, as adoption of higher-margin integrated driver and controller (IDC) chip for mobile display panels gained traction after two years of deployment.
Net profit surged to NT$134 million (US$4.4 million) last quarter, compared with NT$31 million in the second quarter. That also represented an expansion of 44 percent from NT$93 million in the same period last year.
Gross margin edged up to 20.6 percent last quarter from 20.5 percent in the prior quarter.
The growth in IDC chip shipments bolstered the company’s confidence that integrated chips are on track to become the next mainstream solution for mobile LCD panels and would play a key role in fueling FocalTech’s next-stage growth, company chairman Genda Hu (胡正大) said.
Sales of IDC chips should provide a cushion against seasonal weakness this quarter, Hu said.
“Fourth-quarter revenue is likely to drop slightly after hitting the peak in the third quarter [of the year], in line with the seasonal pattern that we have seen in the mobile phone industry over the past three years,” Hu said.
“As our IDC shipment is still growing, we believe we will see a milder [quarterly] decline than our peers,” he added.
Revenue last quarter jumped 26 percent to NT$3.27 billion from NT$2.6 billion in the previous quarter, thanks to growing seasonal demand across the board.
Conventional controller chips for flat panels remained the major revenue source for the chipmaker.
During the quarter ending Sept. 30, FocalTech shipped 19 million IDC chips, a spike of 58 percent from 12 million units in the second quarter, as the cost of IDC chips for in-cell touch modules nears the crossover point compared with that of out-cell touch modules.
As of last quarter, FocalTech had shipped 41 million IDC chips, still far behind the 100 million unit shipment target the company set at the beginning of the year.
“The rate of adoption of IDC chip fell short of our expectations,” Hu said. “We found that high cost was the determining factor behind the slower uptake of IDC chips.”
In addition, mobile phone vendors postponed new product launches by longer than three months to redesign their phones to feature mobile screens with an aspect ratio of 18:9 such as the latest iPhone series.
FocalTech’s IDC chip is used in Xiaomi Corp’s (小米) Xiaomi MIX2, Sharp Corp’s AQUOS S2, Huawei Technologies Co’s (華為) Maimang 6 and Vivo Electronics Corp’s (維沃移動通信) V7 phone, it said.
The company expects market competition to escalate next year, with three or four new rivals, primarily from China, expected to enter the field.
California-based Synaptics Inc is currently its sole competitor.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to