Shares of smartphone camera lens supplier Largan Precision Co (大立光) yesterday took a hit, as investor sentiment cooled ahead of Apple Inc’s iPhone launch on Wednesday next week.
The stock dipped 5.11 percent to close at NT$4,640 in Taipei trading, underperforming the broader market, which slid 0.64 percent to 10,924.30 points.
Other key companies in the Apple supply chain were also affected, including Taiwan Semiconductor Manufacturing Co (台積電), which dropped 1.1 percent to NT$261, and Hon Hai Precision Industry Co (鴻海精密), which declined 1 percent to NT$79.30.
Largan’s bigger pullback reflected its disappointing sales last month.
The company on Wednesday said that revenue last month rose 10 percent annually to NT$5.51 billion (US$178.88 million), bringing aggregate sales in the first eight months of the year to NT$32 billion, 1.26 percent higher compared with a year earlier.
The results fell short of some analysts’ estimates.
Largan gave a conservative outlook for this month, saying it expects sales to hold at current levels, due to production yield challenges and limited capacity.
As the iPhone launch approaches, Largan’s growth prospects could be rocked by a number of developments, local media reported, citing a recent report by Morgan Stanley.
Apple has secured a 10 percent discount on smartphone camera lenses from suppliers, while the US technology giant is expected to slash the retail price of its premium OLED screen models and delay shipments of lower-priced LCD screen models, postponing Largan’s anticipated sales growth spurt, Morgan Stanley said earlier this week.
Other analysts said that as Largan is already producing at capacity, it has little room to take on additional orders from Android phone vendors, such as Huawei Technologies Co (華為) and other Chinese brands, which have been championing the company’s advanced triple-lens design.
Expanding production capacity would be a tall order for the company, which has been working with the government to find land for new plants, Largan has said.
Still, some analysts remain optimistic about Largan’s prospects next year, as the company is well positioned to benefit from aggressive upgrades in smartphone camera specifications.
The rear-facing camera of next year’s iPhones could be upgraded from this year’s 7-megapixel sensor with a four-piece lens to a 12-megapixel sensor with a five-piece lens, Yuanta Securities Investment Consulting Co (元大投顧) said.
Largan’s leading position in smartphone camera technology is further solidified by its seven-piece, periscope lens designs, which are expected to feature in next year’s flagship Android smartphones.
In addition, Huawei has been developing a camera module that utilizes motor control to enable more than two apertures on a single module, Yuanta said, adding that such complex designs would boost Largan’s gross margins.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS