Largan Precision Co (大立光) yesterday reported a 0.96 percentage point quarterly decrease in gross margin to 59.33 percent last quarter, down 6.25 percentage points from a year earlier, due to an unfavorable product mix and rising competition.
Gross margin fell to the lowest level on a quarterly basis since 2015, according to data provided by the Taichung-based handset camera lens maker.
Largan, a supplier to Apple Inc’s new iPhone 13 series, posted net profit of NT$5.26 billion (US$188.2 million) in the third quarter, up 77.72 percent quarterly, but down 10.35 percent annually.
Photo: Liao Cheng-hui, Taipei Times
Third-quarter earnings per share were NT$39.22, compared with NT$43.71 a year earlier and NT$65.38 in 2019, before the onset of the COVID-19 pandemic.
Largan claims to be the industry leader in optical technology, but as customers use mid-specification lenses instead of the company’s high-end products, coupled with the increasing saturation of the smartphone market, it has faced two years of shrinking revenue, lower profit and a falling stock price.
Largan chief executive officer Adam Lin (林恩平) said he remains optimistic about the company’s business outlook, adding that the company has new solutions for long-standing problems in optical products.
The company has overcome “major breakthroughs” in engineering challenges that have “plagued the optical field for years,” and would produce a new generation of camera lenses that can reduce problems such as glare, Lin told an investors’ conference.
“We have seen more clients choose to design-in higher specification lenses. Of course the sales number is still unknown,” Lin said, adding that some are choosing 8P lens modules, with pixel counts of up to 100 or 200 million.
8P refers to a camera lens module that contains eight thin layers of plastic pieces. The higher the layer count, the more advanced the lens.
In January, Apple confirmed that it would stick to 7P lens for iPhones until 2023.
The firm is also developing “double freeform” optical lenses that would solve proportion issues that cause some people in a photograph to appear larger than others.
However, customers are often reluctant to confine their suppliers to a single source, as it limits their ability to negotiate and makes them reliant on a single company.
“We are waiting to go into production on those advanced products as soon as customers see fit to go ahead with them,” Lin said.
Largan shares have fallen by more than 30 percent this year.
Lin, who seldom comments on stock prices, said that Largan is contemplating stock buyback programs.
Plans to expand production capacity by 2023 remain unchanged, he said.
While handset lenses remain Largan’s mainstay products, the company is also expanding into augmented and virtual reality, and automotive camera lens markets, he added.
“As long as a reasonably sized market exists, we will go for it,” Lin said.
Largan shares rose 1.91 percent to close at NT$2,130 yesterday in Taipei.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
RSS