FocalTech Systems Co (敦泰電子), which designs driver and touch controller ICs used in flat panels, yesterday said net income grew last quarter for a second consecutive quarter, thanks to rebounding market share and strong demand for integrated driver and controller (IDC) chips.
The company said it expected to further recoup lost market share this quarter as customers are increasing the adoption of its IDC chips for mobile phones.
IDC chips contributed 50 percent to the company’s overall revenue last quarter.
However, FocalTech said it is conservative about its business this quarter in light of the COVID-19 outbreak in China and a low-season effect for the smartphone industry.
“This adds great uncertainties to our smartphone business. Therefore, we are conservative about our business in the first quarter,” FocalTech chairman Genda Hu (胡正大) said in a statement.
The company reported that net income for last quarter plummeted 30 percent to NT$51 million (US$1.7 million), from NT$73 million in the previous quarter, with earnings per share declining from NT$0.29 to NT$0.2. It reported losses per share of NT$2.65 billion a year earlier.
Revenue expanded 9 percent quarterly and 37 percent annually to NT$2.81 billion last quarter, as the company increased the number of wafer suppliers to avoid the supply constraints incurred in 2018 and 2017.
Gross margin fell to 20.04 percent last quarter, from 23.18 percent in the previous quarter, due to intensive price competition for IDC chips, FocalTech said, adding that on an annual basis, gross margin improved from minus-8.35 percent.
The company said gross margin would improve gradually this year, buoyed by increasing adoption of next-generation IDC chips.
Last year as a whole, FocalTech posted a net loss of NT$206 million, compared with a net loss of NT$2.49 billion in 2018 and the third consecutive year of losses, which the company attributed to a wafer shortage.
Revenue slipped 8 percent to NT$9.16 billion last year from 2018, it said.
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