TPK Holding Co Ltd (宸鴻) yesterday said its net profit almost doubled to NT$591 million (US$20.23 million) last quarter compared with a year ago as it shipped more higher-priced touchpanels for premium smartphones.
This helped the company’s full-year bottom line return to profit after two straight years of losses.
However, the growth momentum is subsiding as the smartphone industry enters its slow season this quarter, TPK chief strategist Freddie Liu (劉詩亮) said in a teleconference.
Short-term headwinds would reduce the company’s revenue by between 35 and 40 percent to between NT$20.5 billion and NT$21 billion, compared with NT$32.87 billion in the final quarter of last year, Liu said.
The company was originally expecting to beat the seasonal slowdown and post a flat first quarter, based on the assumption that its major customer’s new product might gain traction following a belated launch, Liu said.
The seasonal weakness is expected to drive factory utilization lower, with the company’s operating profit breaking even, Liu said.
Despite the hurdles, TPK will endeavor to eke out a profit this quarter through cost improvement and production efficiency, he said.
“With new products entering mass production in the second half, we believe that growth in the second half would be more significant [than the first half],” he said.
“We still believe revenue would grow this year, but it would be very challenging to keep net profit at last year’s level due to intensifying competition,” he added.
To cope with clients’ new demand, TPK plans to boost capital spending by 62 percent to NT$7.5 billion this year from NT$4.63 billion last year, by adding new manufacturing equipment.
The company will continue to invest in on nano-silver touchpanel technology in anticipation of demand for the new type of touchpanel technology, which goes with flexible OLED screens for smartphones, Liu said.
“If we can commercialize the nano-silver technology as soon as possible, it would become a major driver for the company in 2019,” he said.
Customers from the US, China and South Korea have shown strong interest in the technology, he said.
By 2020, the flexible OLED market is estimated to reach US$20 billion, Liu said.
During the final three months of last year, net profit expanded to NT$591 million from NT$296 million in the corresponding period of 2016, after TPK rejoined the supply chain for Apple Inc’s iPhone last year, company data showed.
That translated into earnings per share (EPS) of NT$1.53, up from NT$0.89 a year ago.
On a quarterly basis, net profit slumped 32 percent from NT$870 million, or EPS of NT$2.37, in the third quarter last year.
Gross margin improved to 6.7 percent last quarter from 5.5 percent a year ago. It represented a decline from 8.6 percent in the third quarter last year.
For the full year, TPK swung back to net profit of NT$2.4 billion, or EPS of NT$6.63, from the previous year’s net loss of NT$1.47 billion, or minus-NT$4.27.
DEAL LIKELY DEAD: As takeovers of semiconductor firms become national security issues amid a global microchip shortage, deals are becoming more difficult GlobalWafers Co (環球晶圓) failed to reach a breakthrough in a last-ditch bid to salvage its planned takeover of Siltronic AG, likely spelling the collapse of the US$5 billion deal. The Taiwanese technology company did not resolve the government’s concerns during a private meeting between GlobalWafers chairwoman Doris Hsu (徐秀蘭) and German Federal Ministry for Economic Affairs and Climate Action State Secretary Udo Philipp, people familiar with the matter said. Siltronic shares tumbled as much as 4.7 percent on the news on Friday, extending the stock’s decline for the year to more than 20 percent. While the ministry continues to examine the deal,
BOOMING ORDERS: As orders move away from neighboring countries such as India, Pakistan’s economic bright spot has found new customers in South America and Africa Pakistan’s textile sector is bringing cheer to its flailing economy, with exports set to swell to a record after gaining an edge over South Asian rivals during the COVID-19 pandemic. Textile exports are poised to surge 40 percent from a year earlier to a record US$21 billion in the 12 months ending in June, said Abdul Razak Dawood, commerce adviser to Pakistan’s prime minister. Dawood said that the figure would expand to US$26 billion in the next fiscal year, surpassing the nation’s total exports last year, he said. The textiles industry — which supplies everything from denim jeans to towels for buyers
Samsung Electronics Co is stepping up spending on advanced chipmaking technology as it sees growing demand for its smartphones, displays and memory products. South Korea’s largest company reported 43.6 trillion won (US$36.17 billion) in semiconductor capital expenditure last year, eclipsing rivals as it acquired extreme ultraviolet lithography (EUV) machines to pursue an aggressive expansion of its most lucrative memory and system chipmaking. It expects a recovery in server and PC memory demand, and said foldables are already helping its sales growth, although declined to offer a forecast due to the high degree of uncertainty around supply chains and the COVID-19 pandemic. Samsung
The data transmission speed of 6G (sixth-generation wireless) networks is expected to be 10 to 100 times faster than 5G technology, MediaTek Inc (聯發科) said in a paper released on Jan. 18. 6G standardization is expected to begin in 2024 or 2025, with the first standard technology expected in 2027 or 2028, said MediaTek, one of the world’s leading chip design companies. “Our 6G vision is of an adaptive, integrated and super heterogeneous wireless communication system, delivering pervasive mobile connectivity in a truly ubiquitous manner,” the paper said. The sector is making breakthroughs in the research and development (R&D) of key 6G technologies,