Young Fast Optoelectronics Co Ltd (洋華), the nation’s top maker of touch panels used in mobile devices, yesterday said its board has approved a plan to set up a joint venture with Ritek Corp (錸德) to expand capacity amid growing demand.
Young Fast said it would set up a new capacitive touch panel company with Ritek’s LCD subsidiaries AimCore Technology Co Ltd (安可光電) and RiTdisplay Corp (錸寶), a company filing to the Taiwan Stock Exchange said.
“The joint venture aims to increase the output of capacitive touch glass panels to satisfy customer demand,” Young Fast chief executive Sharon Ho (何逢有) said in the filing.
Capacitive touch panels are now widely used in smartphones, such as Apple Inc’s iPhone.
Yong Fast expects capacitive touch panels to account for 30 percent of its overall revenues this year, up from 15 percent in the fourth quarter of last year and 18 percent of the first quarter of this year.
Resistive touch panels were the major source of revenue, making up about 75 percent of the company’s total revenues of NT$3.69 billion (US$117 million) in the first quarter of this year.
Young Fast would benefit from new product launches by major customers Samsung Electronics Co of South Korea and Taiwan’s HTC Corp (宏達電), as well as new orders from Motorola Inc and Sony Ericsson, Macquarie Securities analyst Lu Chia-lin (呂家霖) said in a report dated last Wednesday.
Increasing orders would help drive the company’s revenues up by 15 percent to 20 percent this quarter, Lu forecast.
Lu gave an “out-perform” rating on Young Fast, with a target price of NT$405 in the next 12 months, implying more than a 35 percent upside when compared with the stock’s closing price of NT$299.50 yesterday.
“The strategic alliance will have an effect in terms of technology, product, manufacturing and market. It is vertical and horizontal integration, which will help boost our capacitive product’s global competitiveness,” Young Fast said.
Young Fast will hold a 40 percent share of the new firm, while AimCore, a supplier of indium-tin oxide glass substrates, which are a key component in touch panels, will own another 40 percent. RiTdisplay, which makes flat panels using organic light-emitting diode technology, will have a 20 percent stake.
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