FocalTech Systems Co Ltd (敦泰科技), which has a 50 percent share of China’s touch controller chip market, swung to a quarterly loss of NT$96.55 million (US$2,998 million) in the first quarter as a strong earthquake delayed shipments.
Last quarter’s losses compared with net profit of NT$28.67 million in the previous quarter and widened from losses of NT$55 million in the prior year, according to a company financial statement.
Revenue last quarter contracted 22 percent from the previous quarter due to seasonally weak demand, fewer working days and shipment delays after a strong earthquake hit southern Taiwan in February.
FocalTech is upbeat about the second quarter, saying that its shipments will grow by a double-digit percentage this quarter from last quarter driven by customer inventory restocking demand and rising shipments of new products such as a new integrated driver and controller (IDC) solution and new touch sensors for on-cell panels.
The IDC solution is a single IC to drive a display and allows manufacturers to design devices with smaller form factors and save on material costs, the company said.
“The second quarter is the peak season as many customers in the smartphone segment start restocking inventory ahead of new model launches,” FocalTech told an investors’ conference.
Revenue for the second quarter is expected to increase by a double-digit percentage, compared with last quarter’s NT$2.31 billion, the company said.
FocalTech chairman Genda Hu (胡正大) said the IDC solution would be one of the biggest growth drivers for the company this year.
The growth momentum is likely to improve in the second half of the year after the company’s second-generation fingerprint sensor enters volume production, he said.
FocalTech expects shipments of its new IDC chip to grow to about 100 million units within six months, after shipping 1 million units in the first quarter, the company said in a statement.
Shipments of sensors for on-cell touch panels will more than double to as many as 15 million units this quarter from last quarter’s 6 million units, the company said.
FocalTech said that a continuing uptrend in gross margin is likely, with it expected to climb to about 20 percent this quarter, from 18.7 percent in the prior quarter.
Yuanta Securities Investment Consulting Co (元大投顧) analyst George Chang (張家麒) said FocalTech’s update of its IDC progress is encouraging, or at least on track with the firm’s prior guidance.
“While IDC shipments remain small, this could be a new area in which FocalTech can avoid some competition and achieve better margins,” Chang said in a note yesterday.
Yuanta forecast the company would report earnings per share of NT$0.1 for the second quarter, an improvement from the first quarter, but still lower than a year earlier, he said in the note.
The company plans to buy back 5 million common shares at between NT$19.67 and NT$42.94 per share in the two-month period from Saturday last week to June 28 and will use the repurchased shares to give its employees bonuses, according to a company filing with the Taiwan Stock Exchange.
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