Largan needs land to expand capacity

TALL ORDER::The company needs at least 30,000 ping of land to expand capacity, and it does not want to turn to China due to rising costs there, CEO Adam Lin said

By Ted Chen  /  Staff reporter, in TAICHUNG

Wed, Jun 13, 2018 - Page 12

Smartphone camera lens supplier Largan Precision Co (大立光) yesterday said that it is looking to expand its Taiwan-based production capacity provided that the government helps it overcome land scarcity.

“Ideally, the company wants to purchase a large, unbroken plot of 30,000 to 40,000 ping [99,174m2 to 132,232m2 ] in Taiwan to expand production capacity,” Largan chief executive officer Adam Lin (林恩平) told a news conference following the company’s annual shareholders’ meeting in Taichung.

However, due to land scarcity, that would be a tall order without help from the government, despite efforts by the company and property agents, Lin said.

Although China has an abundance of low-priced land, it is not necessarily a better option for expansion, as the company would have to deal with rising wages and labor shortages there, Lin said.

If the company could find the land, its production base in Taiwan could be doubled in terms of land area, up from 19,000 ping, he said.

The company is undeterred by slowing growth in smartphone shipments, as demand for smartphone camera lenses is still robust, Lin said.

Thanks to improving production yield rates, sales last month exceeded the company’s expectations, growing 24.57 percent month-on-month and 14.69 percent annually to NT$4.32 billion (US$144.68 million), and the upward trend is expected to continue this month, he said.

There is a significant uptick in order visibility through next month and the company’s plants have been running at full capacity, Lin added.

Clients’ smartphone camera lens specifications are becoming more varied and complex, with advanced lenses being used in more mid-range devices made by customers who are less capable in software image optimization, he said.

While the elevated technical challenge could help the company stay ahead of rivals, it has also steepened the learning curve for each new product design, Lin said, adding that advances in camera sensors must be supported by more capable lenses for improved picture quality.

Customers have continued to push the envelope of smartphone photography, calling for advanced designs, such as multi-camera setups and telephoto lenses that require moving lens parts powered by voice coil motors and actuators, Lin said.

The government should help the smartphone camera lens industry, as the sector does not consume too much water or electricity, Lin said, adding that the plastic materials used in production are readily recyclable.

The company yesterday approved the distribution of a cash dividend of NT$72.5 per share, an all-time high.

The Ministry of Economic Affairs yesterday promised to help Largan, saying that it would play a bridging role between the Taichung-headquartered company and local governments.

“The Taichung area is almost saturated ... there might be some potential sites [for Largan’s new plants] in Changhua County,” Deputy Minister of Economic Affairs Kung Ming-hsin (龔明鑫) told reporters yesterday.

Additional reporting by Kuo Chia-erh