FocalTech paints bright picture ahead of public offering

WELL-POSITIONED::The controller chip maker is riding on the strong demand for low-to-mid-end smartphones in China, where it commands 70 to 80 percent of the market

By Lisa Wang  /  Staff reporter

Wed, Oct 23, 2013 - Page 13

FocalTech Corp (敦泰電子), a major supplier of controller chips for smartphone touch panels in China, yesterday said it expects shipments to grow at least 30 percent next year, benefiting from strong demand for low-to-mid-end smartphones in China.

Smartphone shipments in China are forecast to grow 48 percent to 680 million units next year and another 31 percent to 892 million units in 2015, FocalTech said, citing forecasts by CLSA Securities.

“We shipped 100 million units [of controller chips] in the first half. We believe it will be possible for us to ship more than 200 million units for the whole year,” company chairman Genda Hu (胡正大) told reporters. “We are cautiously optimistic about [demand] in the second half.”

That would imply annual growth of about 54 percent, as FocalTech shipped 130 million controller chips last year.

About 80 percent of the chips shipped last year were for touch panels used in smartphones, while about 20 percent were for tablets, the company said.

“Strong demand in low-and-mid-end smartphones in China has helped boost FocalTech’s business,” company spokesman Pai Pei-lin (白培霖) told a media briefing yesterday.

FocalTech holds about 70 percent to 80 percent share of touch panel controller chips for low-to-medium-end smartphones in China, and about 50 percent of the market for high-end smartphones, Pai said.

FocalTech supplies touch controller chips primarily to Chinese mobile phone makers including Lenovo Group (聯想), ZTE Inc (中興) and Xiaomi Inc (小米).

The company expects new customers and new controller chips used in touch panel for PCs, wearable applications, medical care and cars would boost the company’s revenue next year as well.

To sustain its technological leadership in China, FocalTech plans to ship its first new TDDI chips that integrate controller and touch features in one single chip, in the first half of next year, for in-cell touch panels.

In-cell touch panels are 40 percent slimmer than traditional touch panels by combining touch sensors and TFT glasses, and are expected to be one of the mainstream touch panels next year.

To seek new growth, FocalTech also plans to expand its market to South Korea, the US, Europe and Japan from China, Hu said.

The company now has 350 workers and owns 230 patents including those under review.

FocalTech plans to set up a new technology service center in Xian in China’s Shaanxi Province after operating two — in Beijing and Shanghai.

FocalTech is scheduled to debut its shares on the local stock market on Nov. 8, with the listing price tentatively set at NT$250 per share.