Sat, Oct 20, 2018 - Page 12 News List

Gongin taps into chips, aerospace to drive revenue

By Ted Chen  /  Staff reporter

Gongin Precision Industrial Co (公準精密), which is to debut on the Taipei Exchange next month, yesterday said it expects revenue growth next year to be driven by demand from the semiconductor and aerospace industries.

The company, which makes key precision components for a number of industries with long product cycles and high entry barriers, is upbeat about its margins and top line as it starts shipping new products this quarter.

As semiconductor firms move toward extreme ultraviolet (EUV) lithography to produce advanced 7-nanometer chips, major equipment makers such as ASML Holding NV are increasingly relying on their partners to manufacture deep ultraviolet (DUV) components.

This should benefit Gongin, which has been a partner of ASML for more than a decade, the company said at a pre-listing earnings conference in Taipei.

Although DUV is no longer at the cutting edge, demand has remained robust, supported by growth in artificial intelligence, Internet of Things and automotive electronics, the company said.

Gongin said that it has also secured order for components for other semiconductor equipment, including mask aligners and electron beams.

EUV has a wavelength of 13.5 nanometers, allowing for greater precision in lithography, leading to lower costs, while DUV’s 193-nanometer wavelength requires multipattern exposures to provide adequate imaging resolution on wafers.

The company is also preparing to enter the market for aircraft and motorcycle anti-skid brake systems, and is targetting higher-tier segments after securing a technology license from a leading servo valve research institute.

As of the end of the first half, 51 percent of its revenue was derived from display panel components, followed by 31 percent from semiconductors and 13 percent from aerospace, company data showed.

However, profitability slipped, with margins for display servers falling from 40.4 percent at the end of last year to 35.6 percent in the first half of this year, while margins for semiconductors slid from 21.9 percent to 16.7 percent and those for aerospace plummeted from 0.1 percent to minus-12.1 percent.

The company attributed the margin erosion to preparations to meet customers’ new product specifications.

Net income in the first nine months dropped 17.3 percent year-on-year to NT$65.37 million (US$2.11 million), or earnings per share of NT$1.64. Revenue slid 1.4 percent to NT$839 million during the same period. Gross margin fell 5.3 percentage points to 23.74 percent, Gongin said.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top