Sat, May 04, 2019 - Page 12 News List

TPK benefits from demand for tablets

COMPANY FORECAST:In the worst-case scenario, revenue could increase 42 percent annually, reaching NT$24.93 billion this quarter, which is traditionally the slow season

By Lisa Wang  /  Staff reporter

TPK Holding Co president and chief executive officer Leo Hsieh poses for a photograph in Taipei yesterday.

Photo: Chen Mei-ying, Taipei Times

TPK Holding Co (宸鴻), which counts Apple Inc as its top client, yesterday said resilient demand for large tablets helped it eke out a profit last quarter and that growth momentum would continue to underpin revenue this quarter.

Revenue is expected to slide less this quarter — the traditional slow season — at between 15 and 20 percent from NT$31.16 million (US$1.01 million) last quarter, TPK chief strategic officer Freddie Liu (劉詩亮) told a teleconference.

Based on the forecast, revenue in the worst-case scenario could reach NT$24.93 billion this quarter, representing growth of 42 percent from NT$17.79 billion a year earlier.

“The second quarter is an awkward period, as [customers are] adjusting inventories, while new products will only hit the market probably after the third quarter,” Liu said.

“Based on our experience, the second quarter will be a slow season and growth momentum will only return in the second half when [customers] launch new products,” he said.

With product portfolio optimization and stringent cost controls, TPK aims to break even on operating profit, Liu said.

Operating margin fell to 0.4 percent last quarter, compared with 1.1 percent a year earlier and 0.6 percent the previous quarter.

Demand from tablet clients remains steady, as such products are less vulnerable to seasonal changes than smartphones, Liu said.

Touch modules used in tablets also deliver a better gross margin than smartphones’ force touch sensors, he said.

TPK’s net profit plummeted 64.71 percent to NT$28 million last quarter, from NT$68 million a year earlier. Profits contracted by 87.5 percent from NT$192 million the previous quarter.

Earnings per share sank to NT$0.06 from NT$0.17 a year earlier and NT$0.47 a quarter earlier.

Touch modules used in tablets constituted 16 percent of TPK’s overall revenue last quarter, up from 9 percent in the fourth quarter of last year.

TPK saw shipments of tablet touch modules soar 70 percent quarter-on-quarter after Apple unveiled its 7.9-inch iPad mini and 10.5-inch iPad Air in the spring.

TPK benefited from US clients’ market share gains, as well as larger orders, Liu said.

Touch sensors used in smartphones made up 46 percent of total revenue, lower than 64 percent the previous quarter.

TPK would ramp up production of new touch sensors using silver nanowire technology for all-in-one PCs and public displays next quarter at the earliest, TPK chief executive officer Leo Hsieh (謝立群) said.

The company said it views silver nanowire technology a major solution to make up potential order losses from Apple and plans to spend NT$4 billion on new equipment.

The US firm is expected to stop using force touch sensors in this year’s new iPhones.

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