Largan Precision Co (大立光), a major handset camera lens supplier for Apple Inc’s iPhones, yesterday reported a 22.4 percent year-on-year decline in net profit for last quarter and forecast further shipment weakness this month as the industry enters its traditional slow season.
Net profit in the fourth quarter of last year decreased to NT$6.73 billion (US$213.18 million) from NT$8.97 billion a year earlier, the company said.
The figure fell 5 percent from NT$7.08 billion in the third quarter, it added.
Photo: EPA
Earnings per share slumped to NT$50.4 from NT$65.01 a year earlier and NT$53.05 the previous quarter, it said.
Gross margin last quarter stood at 47.75 percent, improving from 47.2 percent the prior quarter, but down from 59.08 percent from a year earlier due to inventory write-downs, Largan chairman Adam Lin (林恩平) told an investors’ conference.
The company typically builds extra inventory to meet front-loading by clients, but excess stock accumulated over time gets scrapped, weighing on margins, Lin said.
Gross margin could rebound this quarter, as general yield rates and prices have stabilized, but the factory utilization rate remains below the normal level due to seasonal factors, he said.
Revenue this month is expected to be lower than last month’s NT$5.62 billion, and revenue next month is also projected to decline further from this month, as the new year holiday would cut short the number of business days, he added.
Regarding market speculation that Largan is working with Taiwan Semiconductor Manufacturing Co (台積電) on copackaged optics (CPO) technology to supply collimated diameter components, and that Largan has been planning production lines related to CPO, Lin said the company’s research and development covers a wide range of optical lenses, adding that Largan would pursue any technology related to optics.
The company would disclose whether it plans to add new production lines for CPO once production proves viable, he said.
Largan plans to begin shipping its first batch of variable-aperture products in the third quarter of this year, Lin said.
While pricing appears more favorable, yield rates remain uncertain, and whether the products could help improve margins remains to be seen, he said.
This year, Largan would not produce more lenses for ultra-thin smartphone models, as weak sales among leading brands have prompted other handset makers to withdraw such products from the market, Lin said, adding that the company plans to ship more lenses for foldable smartphones toward the end of this year.
A surge in memory prices would add pressure on handset makers, but brands would continue to upgrade lens specifications, offering support to Largan’s business, he said.
Regarding shipments of Largan’s newly developed high-precision visual recognition products for humanoid service robots and artificial intelligence glasses, Lin said development of the products is progressing and shipments have begun, but volumes remain small.
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