Largan Precision Co (大立光) and Catcher Technology Co (可成) on Saturday reported rising revenue for last month from March, after most companies in the handset components sector reported weak first-quarter results amid the sluggish global smartphone market.
As leading suppliers in the global handset supply chain, the two companies’ revenue streams are closely monitored by market watchers to determine whether the smartphone market will follow expectations and show a recovery this quarter, or deteriorate faster than expected.
Handset camera lens maker Largan reported better-than-expected revenue for last month on the back of a continued improvement in yield rates and favorable product trends.
The Taichung-based company saw consolidated revenue reach NT$3.47 billion (US$116.8 million) last month, up 10.34 percent from the previous month.
Last month’s sales were still 6.02 percent lower than a year earlier, according to figures that Largan posted on its Web site on Saturday.
In the first four months of this year, consolidated revenue totaled NT$12.34 billion, down 14.84 percent from NT$14.5 billion during the same period last year.
The bright spot is that higher-priced lenses for cameras of 10 or more megapixels still made up a larger portion of shipments, accounting for 70 to 80 percent of the company’s overall shipments last month, while 8-megapixel products accounted for 10 to 20 percent and the 5-megapixel line contributed up to 10 percent, the company said.
Largan — whose customers include Apple Inc and several Android smartphone vendors — last month said it was upbeat about sales for this month and next month, compared with NT$3.14 billion in March, given the company’s efforts to improve production yield rates.
With potential strong demand for OLED iPhones in the second half of the year and the emerging adoption of triple-camera lenses by some handset vendors, as well as resilient prices and gross margin of the company’s products, Largan could see a year-on-year recovery in sales and operating profit from this month, Yuanta Securities Investment Consulting Co (元大投顧) analyst Jeff Pu (蒲得宇) said in a note on Wednesday last week.
Pu said Huawei Technologies Co (華為) is expected to drive triple-camera lens adoption by introducing a lower-spec device for the Mate 20 model, while Apple is likely to launch a new iPhone model with a triple-lens rear camera in the second half of next year.
Assuming that other vendors would follow suit and therefore boost adoption of the triple-lens design, it could “provide a much-needed improvement in Largan’s capacity utilization rate,” Pu said.
Meanwhile, casing maker Catcher posted revenue of NT$6.6 billion for last month, a surge of 1.3 percent from the previous month and up 28.54 percent from the same period a year earlier.
Cumulative revenue in the first four months totaled NT$27.01 billion, a 36.99 percent annual increase from NT$19.72 billion, the Tainan-based company said.
Catcher also released its audited first-quarter results, which showed that net profit increased 75 percent year-on-year to NT$3.66 billion, the company’s highest level for the same period, with earnings per share of NT$4.75.
However, gross margin declined to 41.75 percent and operating margin to 32.6 percent, both the lowest levels since the second quarter of 2016, company data showed.
Earnings per share in the first quarter came lower than KGI Securities Investment Advisory Co’s (凱基投顧) estimate of NT$5.27 and a market consensus forecast of NT$6.7.
Analysts said ahead of the data release that Catcher’s sales would be particularly strong in the second half of this year, closely aligned with customers’ scheduled launches of new products.
“The company’s sales in the first quarter were affected by weak iPhone demand and sales in the second quarter could be affected by the delayed launch of a new MacBook Air model,” KGI researchers led by Angela Hsiang (向子慧) said in a note on Monday last week.
KGI predicted that sales in the second half would be 65 percent higher than in the first half, and that profit in the second half would grow 124 percent from the previous half.
Overall, Catcher is likely to maintain its lead over metal casing peers in terms of profitability this year, thanks to its highly automated production lines and in-house development of cutters, tooling, fixture and feeder parts, which would allow the company to enjoy lower manufacturing costs, while having the capability to rapidly increase short-term production with a high yield and efficiency rate, KGI said.
Shares in Taiwan closed at a new high yesterday, the first trading day of the new year, as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to break records amid an artificial intelligence (AI) boom, dealers said. The TAIEX closed up 386.21 points, or 1.33 percent, at 29,349.81, with turnover totaling NT$648.844 billion (US$20.65 billion). “Judging from a stronger Taiwan dollar against the US dollar, I think foreign institutional investors returned from the holidays and brought funds into the local market,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Foreign investors just rebuilt their positions with TSMC as their top target,
H200 CHIPS: A source said that Nvidia has asked the Taiwanese company to begin production of additional chips and work is expected to start in the second quarter Nvidia Corp is scrambling to meet demand for its H200 artificial intelligence (AI) chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for this year, while Nvidia holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said that Nvidia has asked TSMC to begin production of the additional chips and work is expected to start in the second
REVENUE PERFORMANCE: Cloud and network products, and electronic components saw strong increases, while smart consumer electronics and computing products fell Hon Hai Precision Industry Co (鴻海精密) yesterday posted 26.51 percent quarterly growth in revenue for last quarter to NT$2.6 trillion (US$82.44 billion), the strongest on record for the period and above expectations, but the company forecast a slight revenue dip this quarter due to seasonal factors. On an annual basis, revenue last quarter grew 22.07 percent, the company said. Analysts on average estimated about NT$2.4 trillion increase. Hon Hai, which assembles servers for Nvidia Corp and iPhones for Apple Inc, is expanding its capacity in the US, adding artificial intelligence (AI) server production in Wisconsin and Texas, where it operates established campuses. This
Garment maker Makalot Industrial Co (聚陽) yesterday reported lower-than-expected fourth-quarter revenue of NT$7.93 billion (US$251.44 million), down 9.48 percent from NT$8.76 billion a year earlier. On a quarterly basis, revenue fell 10.83 percent from NT$8.89 billion, company data showed. The figure was also lower than market expectations of NT$8.05 billion, according to data compiled by Yuanta Securities Investment and Consulting Co (元大投顧), which had projected NT$8.22 billion. Makalot’s revenue this quarter would likely increase by a mid-teens percentage as the industry is entering its high season, Yuanta said. Overall, Makalot’s revenue last year totaled NT$34.43 billion, down 3.08 percent from its record NT$35.52
RSS