Genius downplays oversupply concerns, says demand to support rising capacity

By Ted Chen  /  Staff reporter

Sat, Dec 08, 2018 - Page 12

Genius Electronic Optical Co (玉晶光) yesterday downplayed concerns about oversupply, saying that capacity expansions by the company and its peers would be sustained by steady growth in overall end application demand.

Over the course of this year, the company has upgraded its older facilities and increased production capacity by about 30 percent, Genius chairman Jones Chen (陳天慶) told an investors’ conference.

Local rival camera lens supplier Largan Precision Co (大立光) and Chinese competitors have also been ramping up output, he said.

Automotive electronics, in particular advanced driver-assistance systems, would continue to drive demand for optical lenses, Chen said, adding that new automobile designs call for as many as 14 lenses per vehicle.

As for smartphones, the number of front-facing cameras has increased from one to three to enable 3D sensing capabilities, while the number of rear-facing main cameras has climbed to more than three, he said.

“Some smartphones are designed with five or six rear-facing cameras to facilitate augmented-reality applications,” Chen said.

“Instead of a supply glut in the industry, we are more worried about our own production yield rate, efficiency and product development,” he said.

However, the continued migration to more lenses, more pieces per lens and higher imaging resolution would sustain overall growth in the industry, he added.

Genius is ready to accommodate designs with both plastic and glass lenses and to meet clients’ specifications, Chen said.

While glass lenses have superior imaging capabilities, they are more costly to produce and face greater difficulties in attaining an optimal yield rate, he said, adding that plastic lens production can be scaled up more easily.

“We have submitted our glass lens designs to clients, but adoption has been slow,” Chen said.

Genius is to begin shipping advanced automotive lenses to North American automakers in the third quarter of next year, he said.

However, due to market conditions, the company has grown more reserved about further expansion next year, Genius president Kuo Ying-li (郭英理) said.

The firm, which supplies camera lenses for Apple Inc’s iPhones, has over the past month seen its revenue drop due to tepid market response to this year’s new iPhone models.

It also faces headwinds in China, where it supplies camera lenses through a partnership with Huawei Technologies Co (華為) camera module maker O-film Tech Co (歐菲光).

Genius reported that net income in the first nine months of this year rose 39 percent annually to NT$639.08 million (US$20.7 million) and revenue increased 10 percent annually to NT$5.82 billion, or earnings per share of NT$6.47.