Touch module and sensor supplier TPK Holding Co (宸鴻) yesterday gave a lukewarm outlook for the second half of this year, as the COVID-19 pandemic has upended the industry’s seasonal patterns.
Amid pandemic-related transportation restrictions and social distancing, online learning and remote working fueled demand for notebook computers and tablets in the first half, TPK chairman Michael Chiang (江朝瑞) told reporters after an annual shareholders’ meeting in Taipei.
“This was a big surprise for us, as we thought demand would have dipped [in the first half],” Chiang said. “I think there will be no explosive [revenue] growth in the second half, but a mild one.”
Photo: CNA
The company also saw robust demand for silver nanowire touch modules for 85-inch electronic whiteboards from schools, Chiang said, adding that TPK expects shipments of silver-nanowire touch modules used in large electronic whiteboards to grow 30 percent annually this year.
Like most of its peers, TPK usually sees revenue increase significantly in the second half of the year compared with the first half, as customers start restocking inventories ahead of annual product launches and year-end shopping sprees.
Over the past five years, TPK reported at least 30 percent more revenue in the July-to-December period than in the first six months of the year, company data showed.
“The second half of this year will be relatively flat,” Chiang said.
Average selling prices would continue to spiral down, Chiang said, adding that the company has tried to save costs to keep its business afloat
The company’s board of directors did not propose the distribution of a cash dividend, as it only eked out a profit of NT$209 million (US$7.03 million), or NT$0.51 a share, last year.
TPK had a gross margin of 3.5 percent and an operating margin of only 0.1 percent last year.
To improve its profitability, TPK yesterday said that it is diversifying from its core touch sensor and module business, and is looking for higher-margin businesses.
For the first time, TPK is attempting to build local manufacturing capacity in Taoyuan’s Gueishan District (龜山) to make insoles for athletic footwear and protective gear for sports using 3D printing technology, Chiang said.
The company is also working on two new projects with customers in the information technology sector, he said, without disclosing the names of its two partners.
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