Profits for electronics parts maker Lite-On Technology Corp (光寶科技) grew 16 percent annually in the first quarter of the year, driven mainly by high-end modules for dual camera lenses used in smartphones, the company reported yesterday.
The company’s net income of NT$1.98 billion (US$65.52 million) marks its highest quarterly result over the period in the past 13 years, Lite-On data showed, while earnings per share were NT$0.85 last quarter, compared with NT$0.74 a year earlier.
“The high-end camera module segment was the main contributor last quarter. Its revenue expanded by 20 percent from the same time a year ago,” Lite-On chief executive officer Warren Chen (陳廣中) told an investors’ conference in Taipei.
Higher shipments of its LED components and LED outdoor lighting products also boosted its earnings in the January-to-March period, Lite-On said.
Consolidated sales were NT$51.4 billion in the first quarter, up 3 percent year-on-year, Lite-On reported earlier this month, when it attributed the increase to stable market growth from the cloud computing, LED lighting and high-end camera module businesses.
However, the company yesterday said its operating margin contracted by 0.09 percentage points annually to 4 percent last quarter, while its gross margin dropped 0.22 percentage points to 13 percent, citing the negative effect of rising raw material costs that eroded earnings of its information technology business.
In addition, a supply shortage of NAND flash memory chips also delayed shipments of its storage products and affected the overall margin performance, the company said.
Chen said the continued component shortage and increasing prices of raw materials would keep adding pressure on Lite-On’s margin performance this quarter.
“On the bright side, as more clients adopt dual-camera features for their flagship smartphones, we forecast the top and bottom lines to climb further,” Chen said.
Lite-On’s camera clients are mainly Chinese smartphone vendors, such as Huawei Technologies Co (華為) and Oppo Mobile Telecommunications Co (歐珀移動), which both launched high-end smartphones with dual cameras this quarter.
In light of the growing demand for camera modules, the company plans to expand its production capacity in the second half of this year, Chen said, declining to disclose the range of the expansion as the investment amount is not yet finalized.
The expanded capacity would be used for smartphones and new applications, such as camera modules for 3D-sensing and 360-degree cameras, Chen said, adding that they could be used in wearable products, drones or for surveillance.
Lite-On shares have risen 8.23 percent since the beginning of the year, compared with the broader market’s 6.68 percent increase. The stock closed at NT$52.6 yesterday in Taipei trading.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such