Largan to proceed with expansion plan

ADDED FEATURES::CEO Adam Lin said that price erosion was not a concern, as the complexity of front-facing camera units would increase as technology improves

By Ted Chen  /  Staff reporter

Fri, Jan 11, 2019 - Page 12

Smartphone lens maker Largan Precision Co (大立光) is to proceed with its expansion plans, despite slowing growth in the global market, Largan chief executive officer Adam Lin (林恩平) told a teleconference with investors yesterday.

The company’s added capacity would be filled as smartphone designs continue to trend toward triple-camera configurations, sustaining demand for lenses, Lin said.

Concurrently, the company’s leading-edge seven-piece lenses began shipping at the end of last year, with many of them being used in triple-camera configurations, he said.

The company would refrain from taking orders with subpar profitability to fill expanded capacity, instead looking for viable opportunities in other high-end applications such as 3D sensing and in-display fingerprint sensing, he said.

“We are not concerned about price erosion,” Lin said.

As more smartphones adopt edge-to-edge screens, the complexity of front-facing camera units is to increase, as the units must also take on 3D sensing duties while conforming to smaller form factors, he said.

In light of slowing smartphone sales, Josephine Huang (黃印嘉), special assistant to Lin, said that the company’s inventory levels are still in a healthy range.

A newly developed product is expected to begin shipping toward the end of this year or early next year, Lin said, adding that the product was not made specific to a single customer and samples have been sent to multiple clients.

Revenue for this month is likely to remain little changed from last month, but is expected to dip next month due to disruptions from the Lunar New Year holiday, Lin said, adding that order cuts as a result of poor sales by its major clients led to the company’s poor showing last quarter.

However, smartphones remain the company’s priority, given the availability of orders for advanced automotive lens products, he said.

In the October-to-December quarter, the company reported net income dropped 22.6 percent quarterly to NT$6.48 billion (US$210.5 million), with revenue falling 23.81 percent to NT$12.44 billion.

Earnings per share (EPS) were NT$48.3 for the quarter, while gross margin fell 1.9 percentage points to 69.44 percent, it said.

For last year as a whole, net income fell 6 percent annually to NT$24.37 billion, with revenue dipping 6 percent to NT$49.95 billion. EPS were NT$181.68, down from NT$193.65 a year earlier, it said.