Fri, Nov 02, 2018 - Page 12 News List

Apple touchpanel supplier back in black

By Lisa Wang  /  Staff reporter

Touchpanel manufacturer TPK Holding Co (宸鴻), an Apple Inc supplier, swung into the black last quarter, benefiting from its customers’ launch of new smartphones and tablets, a company executive said yesterday.

The company posted a profit of NT$191 million (US$6.18 million) for the July-to-September quarter, reversing a net loss of NT$227 million in the second quarter.

On an annual basis, net profit dipped 78 percent from NT$870 million after the company rejoined Apple’s iPhone supply chain.

TPK expects the growth momentum to extend into the current quarter, thanks to a strong uptake of its major customer’s new products, chief strategist Freddie Liu (劉詩亮) told an investors’ conference.

“We are optimistic about new product sales and client orders in the fourth quarter,” Liu said. “We believe a 30 percent [quarterly] growth in revenue is an achievable goal.”

TPK saw its revenue last quarter spike 80.9 percent sequentially to NT$32.19 billion, with the smartphone segment accounting for 55 percent of the total, up from 33 percent in the previous quarter.

In terms of profitability, the company expects its operating margin to improve to between 1 and 2 percent this quarter from 0.6 percent last quarter and 2.2 percent a year ago, Liu said.

Liu attributed the year-on-year contraction to the lower average selling price of a new touch module due to intensifying competition from local rival General Interface Solution Holding (GIS, 業成).

GIS and TPK each account for 50 percent of Apple’s orders for touch modules for its new, lower-priced iPhone XR.

TPK implied that it also provides 3D force touch lamination services for the iPhone XS and iPhone X Max.

The company said its top client accounted for a bigger portion — 58 percent — of its revenue last year, up from 42 percent in the second quarter.

TPK’s new silver-nano-wire (SNW) touch technology is to enter mass production next year, targeting large-sized display markets, such as schools, enterprises and public areas.

It would take two more years to apply SNW technology to foldable phones or tablets as the industry is not yet ready in terms of key component supplies, such as flexible OLEDs and casings, TPK said.

In response to an investor’s question on how it is coping with the US-China trade dispute, Liu said TPK is not moving production out of China given its labor and supply chain advantages.

TPK’s manufacturing hub is in Xiamen in China’s Fujian Province.

The company plans to spend NT$7.5 billion this year on new equipment mainly for its customers’ new products, Liu said.

The capital expenditure next year would drop significantly as no major revamp is planned for new models, he said.

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