Touchpanel module makers are facing growing pressure as an annual price decline of 15 percent this year due to cut-throat competition and weak demand for laptops has squeezed their profitability, market researcher NPD DisplaySearch said yesterday.
That would bring down the gross margin of touchpanel module makers to well below 10 percent later this year and change the industrial landscape, NPD DisplaySearch analyst Calvin Hsieh (謝忠利) told reporters on the sidelines of a forum on the industry.
“As a result, some companies are expected to be forced out of the market. However, the consolidation will help improve the health of the industry,” Hsieh said.
Last year alone, more than 100 small-scale Chinese touchpanel module manufactures shut down factories after prices plunged more than 50 percent year-on-year during a price war, Hsieh said. NPD DisplaySearch now tracks 50 touchpanel companies around the globe.
Hsieh expects prices of touchpanel modules for handsets to drop 15 percent year-on-year to US$1 per inch this year and prices of one-glass-solution (OGS) touchpanel modules for notebooks to plunge about 20 percent year-on-year to about US$1.60 per unit.
That would bring down gross margin of touchpanel module makers to well below 10 percent later this year, Hsieh said.
Hsieh blamed the slow uptake of notebooks with touchpanels and stiff competition for the slump. Only 15 percent of laptops — including tablets with attachable keyboards — will have touch screens this year, compared with 11.6 percent last year, NPD DisplaySearch forecast.
The existing capacities for notebooks would not be totally consumed until the penetration rate rises to 25 percent at least, Hsieh said.
A dramatic price decline in OGS touchpanel modules would make low-cost laptop touchpanel modules from LCD panel makers AU Optronics Corp (友達) and Innolux Corp (群創) unattractive, he said.
NPD DisplaySearch projected that global touchpanel module shipments would grow 14 percent to 1.72 billion units this year from last year’s 1.51 billion units, but revenue from touchpanel modules would drop 2 percent annually to NT$28.4 billion (US$945 million).
Because of the slow adoption of touch screens for notebooks, TPK Holdings Inc (宸鴻), the world’s largest touchpanel module maker, decided to postpone until next month its construction of a new 5.5-generation factory for OGS touchpanel modules in China.
TPK’s gross margin shrank to 8.9 percent last quarter from 10 percent in the first quarter and 14.3 percent in the second quarter of last year. This quarter, TPK expects to break even after operating profit margin fell to 0.3 percent last quarter from 11 percent in the first quarter and 6.7 percent in the second quarter of last year.
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
RSS