Electronics supplier Lite-On Technology Corp (光寶科技) on Tuesday announced that it would sell its loss-making mobile mechanical business to China’s Top-Touch Electronics Co (深越光電) in a 530 million yuan (US$77.14 million) deal.
The divestment would include Zhuhai Lite-on Mobile Technology Co (珠海光寶移動通信科技), Guangzhou Lite-On Mobile Electronic Components Co (廣州光寶移動電子部件) and Shenzhen Lite-On Mobile Precision Molds Co (光寶移動精密模具), the Taipei-based company said, adding that proceeds from the deal would be booked next quarter.
The company’s monthly sales are to drop by about NT$300 million (US$9.73 million) due to the sales of the units, it said.
Lite-On would continue to focus its business transformation on cloud computing, LED components, outdoor and automotive lighting, automotive electronics, biomedical technology and industrial automation, vice chairman and chief operating officer Warren Chen (陳廣中) said.
Chinese companies are vying to upgrade to higher tiers through acquisitions as competition in the smartphone supply chain heats up.
Lite-On’s mobile mechanical business in the second quarter of this year contributed NT$2.68 billion, or 5 percent of the company’s top line, down 20 percent sequentially from NT$3.35 billion and 7 percent of total revenue a quarter earlier, company data showed.
The unit’s losses accelerated from NT$288 million at the end of March to NT$563 million at the end of last quarter.
Lite-On has invested more than US$187 million in its three mobile mechanical businesses, but their aggregate net losses exceeded US$82.97 million, the company said in a filing with the Taiwan Stock Exchange.
The company reported that revenue last month rose 20 percent sequentially and 8 percent annually to NT$18.59 billion, excluding revenue contribution from its mobile camera module business, which was sold to another Chinese buyer in June.
Aggregate revenue in the first eight months of the year reached NT$137.32 billion, slipping 0.15 percent from a year earlier.
The company said that information technologies, its biggest business with 59 percent sales contribution, grew steadily last month on the back of stable demand for power supply, as well as management products for cloud computing servers and artificial intelligence-powered home devices.
Its optoelectronic business segment, accounting for 15 percent of sales, benefited from growing demand for invisible LED and stable delivery of LED automotive lighting to post a 10 percent annual increase in revenue, the company said.
Its storage segment, which accounts for 20 percent of total revenue, last month posted a 30 percent annual gain in revenue thanks to robust demand from cloud computing applications, it said.
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