FocalTech Corp (敦泰科技), which controls about 40 percent of China’s touch-sensor market, reported 1.6 percent growth in net income for last quarter, bucking the industry’s seasonal downtrend.
Net profit rose to NT$301 million (US$9.96 million), or NT$5.45 per share, from NT$291 million or NT$5.04 per share in the final quarter last year, according to the company’s financial statement.
Gross margin improved to 41.8 percent last quarter, compared with 41.5 percent a quarter ago, ending three quarters of declines.
Better first-quarter results strengthened FocalTech’s confidence about further growth this year.
“In general, in the first quarter, [shipments] usually decline significantly from the fourth quarter [of previous year], but we do not see this phenomenon this year,” chairman Genda Hu (胡正大) told investors yesterday.
That signaled “this year will be better than last year. There is no doubt that there will be year-on-year growth [in terms of revenue and net profit],” Hu said.
The growth would be driven by increasing replacement demand of handsets using 4G technology in China and rising demand for bigger touch handset screens, Hu said.
About 92 percent of its first-quarter revenue, which totaled NT$1.2 billion last quarter, is from touch sensors for smartphones.
Gross margin would be steady this year, compared with last year’s 44 percent, Hu said. FocalTech’s strategies are to offer more high-end and better-price chips, including in-cell touch sensors for high-end phones, to stave off ongoing price downtrend, he said.
The chipmaker began shipping in-cell touch sensors for Chinese panel maker Tianma Micro-electronics Co (天馬微電子) last quarter, making it the world’s second company after Apple Inc supplying in-cell touch sensors.
FocalTech plans to ship new fingerprint sensors next quarter at the earliest.
Commenting on its merger with Orise Technology Co (旭曜科技), FocalTech said it already saw positive impact. Orise makes driver ICs for flat panels. The deal is set to be completed on Jan. 2 next year.
“We are building stronger partnership with flat-panel makers after the deal was announced in April,” Hu said.
FocalTech will supply touch sensors to Tokyo-based panel maker Japan Display Inc, which is one of Orise’s clients, replacing US rival Synaptics Inc, Hu said.
In addition, he said the merger would help integrate technologies and resources of the two companies, as well as speed up the launch of a new chip that integrates touch sensor and driver IC.
FocalTech plans to unveil this chip in the fourth quarter this year, hoping to see meaningful revenue contribution from the new chip in the second half of next year, Hu said.
FocalTech supplies touch controller chips primarily to Chinese firms including Xiaomi Corp (小米) and Lenovo Group Ltd (聯想), as well as Taiwan’s HTC Corp (宏達電) and Acer Inc (宏碁).
The company yesterday trimmed its forecast about revenue contribution from its new on-cell touch sensors this year to about 15 percent, from a range of between 15 percent and 30 percent estimated previously, as drastic price cuts by traditional touch panel makers would slower uptake of on-cell touch panels, Hu said.
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