Largan Precision Co (大立光) and Catcher Technology Co (可成) on Saturday reported rising revenue for last month from March, after most companies in the handset components sector reported weak first-quarter results amid the sluggish global smartphone market.
As leading suppliers in the global handset supply chain, the two companies’ revenue streams are closely monitored by market watchers to determine whether the smartphone market will follow expectations and show a recovery this quarter, or deteriorate faster than expected.
Handset camera lens maker Largan reported better-than-expected revenue for last month on the back of a continued improvement in yield rates and favorable product trends.
The Taichung-based company saw consolidated revenue reach NT$3.47 billion (US$116.8 million) last month, up 10.34 percent from the previous month.
Last month’s sales were still 6.02 percent lower than a year earlier, according to figures that Largan posted on its Web site on Saturday.
In the first four months of this year, consolidated revenue totaled NT$12.34 billion, down 14.84 percent from NT$14.5 billion during the same period last year.
The bright spot is that higher-priced lenses for cameras of 10 or more megapixels still made up a larger portion of shipments, accounting for 70 to 80 percent of the company’s overall shipments last month, while 8-megapixel products accounted for 10 to 20 percent and the 5-megapixel line contributed up to 10 percent, the company said.
Largan — whose customers include Apple Inc and several Android smartphone vendors — last month said it was upbeat about sales for this month and next month, compared with NT$3.14 billion in March, given the company’s efforts to improve production yield rates.
With potential strong demand for OLED iPhones in the second half of the year and the emerging adoption of triple-camera lenses by some handset vendors, as well as resilient prices and gross margin of the company’s products, Largan could see a year-on-year recovery in sales and operating profit from this month, Yuanta Securities Investment Consulting Co (元大投顧) analyst Jeff Pu (蒲得宇) said in a note on Wednesday last week.
Pu said Huawei Technologies Co (華為) is expected to drive triple-camera lens adoption by introducing a lower-spec device for the Mate 20 model, while Apple is likely to launch a new iPhone model with a triple-lens rear camera in the second half of next year.
Assuming that other vendors would follow suit and therefore boost adoption of the triple-lens design, it could “provide a much-needed improvement in Largan’s capacity utilization rate,” Pu said.
Meanwhile, casing maker Catcher posted revenue of NT$6.6 billion for last month, a surge of 1.3 percent from the previous month and up 28.54 percent from the same period a year earlier.
Cumulative revenue in the first four months totaled NT$27.01 billion, a 36.99 percent annual increase from NT$19.72 billion, the Tainan-based company said.
Catcher also released its audited first-quarter results, which showed that net profit increased 75 percent year-on-year to NT$3.66 billion, the company’s highest level for the same period, with earnings per share of NT$4.75.
However, gross margin declined to 41.75 percent and operating margin to 32.6 percent, both the lowest levels since the second quarter of 2016, company data showed.
Earnings per share in the first quarter came lower than KGI Securities Investment Advisory Co’s (凱基投顧) estimate of NT$5.27 and a market consensus forecast of NT$6.7.
Analysts said ahead of the data release that Catcher’s sales would be particularly strong in the second half of this year, closely aligned with customers’ scheduled launches of new products.
“The company’s sales in the first quarter were affected by weak iPhone demand and sales in the second quarter could be affected by the delayed launch of a new MacBook Air model,” KGI researchers led by Angela Hsiang (向子慧) said in a note on Monday last week.
KGI predicted that sales in the second half would be 65 percent higher than in the first half, and that profit in the second half would grow 124 percent from the previous half.
Overall, Catcher is likely to maintain its lead over metal casing peers in terms of profitability this year, thanks to its highly automated production lines and in-house development of cutters, tooling, fixture and feeder parts, which would allow the company to enjoy lower manufacturing costs, while having the capability to rapidly increase short-term production with a high yield and efficiency rate, KGI said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by