Fingerprint sensor maker Egis Technology Inc (神盾) yesterday reported that its second-quarter net profit contracted by 35 percent from a year earlier due to sluggish smartphone demand amid fallout from the COVID-19 pandemic and foreign-exchange losses.
While customer demand for fingerprint sensors for all smartphone price ranges has shown signs of rebounding in the second half, an extremely tight supply of wafers has become a new headache for Egis, chief financial officer George Chang (張家麒) told a live-streaming conference.
“We are seeing strong customer orders coming in for the third quarter, but wafer supply has become an issue. Because of a wafer shortage, we cannot 100 percent fulfill customers’ [demand],” he said.
In a worst-case scenario, this could lead to delays in shipments, but orders would be secure, Chang said.
Rising demand would help lift this quarter’s revenue pass last quarter’s NT$1.52 billion (US$51.5 million), Chang said.
Egis’ confidence about revenue growth is also built on customers’ lower inventory, prompting them to rebuild inventory in preparation for the peak demand in the second half of the year, he said.
Egis is also making progress in adding new customers. It has started shipping optical fingerprint sensors to a new client from China. Revenue contribution from this customer would start trickling in this quarter, the firm said, declining to name the customer.
Egis, which counts Samsung Electronics Co among its major customers, said it is broadening its customer base to fend off growing competition from Chinese rivals, primarily Goodix Technology Inc (匯頂科技), which also supplies Samsung.
The company is also gaining more Chinese customers, including Huawei Technologies Co (華為), for which it supplies fingerprint sensors for premium and 5G phones.
During the quarter ending in June, Egis’ net profit fell 35.36 percent to NT$170 million (US$5.75 million), compared with NT$263 million in the second quarter last year. That represented a quarterly contraction of 27.65 percent from NT$235 million.
Earnings per share (EPS) fell to NT$2.5 last quarter from NT$3.5 a year ago and NT$3.4 a quarter earlier. Egis attributed the fall in part to an unrealized foreign-exchange loss of NT$66 million.
Gross margin improved to 45 percent last quarter from 38 percent in the prior year, but edged lower from 46 percent in the first quarter as it shipped more lower-margin capacitive fingerprint sensors for LCD panels, it said.
Net profit in the first half was NT$404.48 million, up 9.31 percent from NT$370.04 million during the same period last year. EPS rose to NT$5.85 from NT$5.37.
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