TPK Holdings revenue falls 35 percent

OUT OF TOUCH::There has been less demand for touchscreen notebook computers than expected. TPK is slowing expansion in Fujian and its subsidiary is closing lines

By Lisa Wang  /  Staff reporter

Wed, Nov 06, 2013 - Page 14

TPK Holdings Co Ltd (宸鴻), a touchpanel supplier for Apple Inc, yesterday posted about a 35 percent annual decline in revenue for last month as demand slackened.

Revenue fell to NT$11.17 billion (US$379 million) last month, compared with NT$16.99 billion in October last year, according to a company statement, following 5 percent growth from September’s NT$10.64 billion.

TPK on Thursday last week forecast a quarterly growth in revenue of between 15 percent and 25 percent from NT$29.47 billion last quarter, which was a three-year low, amid tepid demand for touchpanels used in smartphones, notebook computers and all-in-one PCs.

TPK is likely to post its first quarterly loss in the company’s history this quarter as it expects operating margin to fall to between 2 percent and 3 percent because of price competition, compared with 4 percent last quarter and 13.8 percent a year ago.

The touchpanel maker also expects to book a write off of NT$2.2 billion from its touchpanel subsidiary Cando Corp (達鴻先進) this quarter.

To cope with weak demand, TPK has slowed capacity expansion at a 5.5G plant in China’s Fujian Province.

Cando on Monday said it planned to shut down two local production lines in Hsinchu to save costs and integrate its Hsinchu resources with a new plant in Greater Taichung. Cando makes touchpanels used in notebook computers.

“The penetration of touchscreen notebook computers is less than expected, causing market supply to greatly exceed demand,” Cando said in a filing to the Taiwan Stock Exchange.

Cando, which lost NT$710 million in the first half of the year, said half of the 1,000 workers in the factory would be affected by the shutdown.

TPK, which holds a 20 percent stake in Cando, booked a NT$230 million loss in the third quarter.

TPK shares tumbled 5.29 percent to NT$170 yesterday and those of Cando plunged 5.7 percent to NT$6.62.