TPK hopes to benefit from change in iPad touchscreen

BY Kevin Chen  /  Staff reporter

Tue, Feb 05, 2013 - Page 14

Touch-panel maker TPK Holding Co (宸鴻) yesterday said its consolidated revenue fell 11.7 percent last month from a month earlier, but rose 35.8 percent from a year ago.

TPK, a major supplier of touch modules for Apple Inc’s iPhone, smartphones and iPad tablet computers, posted revenue of NT$19.77 billion (US$681 million) last month, compared with NT$22.39 billion in December last year and NT$14.56 billion for January last year, according to a company statement.

The Taipei-based company, which also supplies touch panels using one-glass-solution (OGS) for notebook computers and Ultrabooks, did not elaborate on the revenue decline last month in the statement, nor provide sales guidance for this month.

This quarter, TPK’s revenue is forecast to drop by 33 percent to NT$41.25 billion from NT$61.48 last quarter, and operating margins may fall to 10.7 percent from 11.9 percent, as many tablets will enter the end-of-life (EOL) status, meaning the devices will become obsolete because of changes in technology, although demand for notebook touch-screens will remain stable, Fubon Securities Investment Services Co (富邦投顧) analyst Jeff Pu (蒲得宇) said in a report on Jan. 24.

Credit Suisse yesterday said TPK would probably benefit from Apple’s probable move to change the touch-sensor solution and structure of its next-generation 9.7-inch iPad to the so-called G2F –– Glass/DITO (double sided indium tin oxide) film structure from current G/G (glass/glass) solution, for a thinner and lighter product.

“Our analysis shows that TPK would be the biggest beneficiary in the Taiwan touch panel supply chain if Apple Inc adopts the G2F structure for its 9.7-inch iPad in the second half of this year,” Credit Suisse’s Jerry Su (蘇厚合) said in a note.

TPK could also gain market share at the expense of smaller rival Wintek Corp (勝華) if the latter is excluded from the 9.7-inch iPad supply chain, he wrote.

“Wintek could be damaged the most in this potential transition, given that it might be excluded from the supply chain in the second half of this year through 2014,” Su said.

The Greater Taichung-based Wintek Corp yesterday said in a filing to the Taiwan Stock Exchange that its consolidated revenue for last month rose 4.75 percent to NT$7.35 billion from December, but declined 17.28 percent from a year earlier.

Su said the potential order loss could negatively impact Wintek’s earnings, forcing the company to fall into the red again this year, if it fails to fill the G/G capacity with OGS touch screens for notebooks and tablets.

Shares of TPK rose 0.79 percent to NT$509 yesterday ahead of the release of last month’s sales results, while Wintek’s dropped 2.16 percent to NT$13.6. Both underperformed on the TAIEX which rose 0.86 percent.