Largan Precision Co (大立光), Taiwan’s leading maker of handset lenses, yesterday said its net income in the second quarter expanded 30.9 percent from the first quarter, thanks to strong market demand for smartphones including the hot-selling iPhone.
Net income totaled NT$961 million (US$30 million), or NT$7.17 per share in the April to June period, up from NT$735 million, or NT$5.48 a share, in the earlier three months and higher than NT$418 million, or NT$3.14 per share, a year earlier.
Largan saw its quarterly sales expand 23.8 percent to NT$2.76 billion from the first quarter as the firm enjoys a dominant position in the phone lens market — as half of the mobile phones from the top four smartphone makers use its lenses. Its quarterly sales were NT$1.8 billion a year ago.
However, gross margin slid to 47.21 percent in the second quarter from 48.54 percent in the first quarter, compared with 45.59 percent a year earlier, the company said.
Largan — whose customers include Apple Inc, Research in Motion Ltd and HTC Corp (宏達電) — attributed the drop in margin to the purchase of other makers’ voice coil motors (VCM).
The company sources VCMs — one of the three auto focus actuator technologies used in camera lenses — from outside makers and then assembles them with its own lenses. That drives up the production costs and brings down margin.
Largan is currently ramping up in-house production of VCMs, but an improved yield rate from mass production will only begin to be seen next year, chairman Tony Chen (陳世卿) told investors.
The company said it expects to usher sales growth for the current quarter on peak seasonality, but margin will continue to slide because of the low yield rate in VCM production.
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