TAIPEI: FocalTech Systems Co Ltd, which has a 40 percent share of China’s touch controller chip market, yesterday reported a net profit of NT$62.6 million (US$1.97 million) for last quarter on improving customer demand, ending three quarters of losses.
The company lost NT$54.25 million in the first quarter of this year.
FocalTech expects the growth momentum to extend into this quarter, driven by rising shipments of its new high-margin chips.
Revenue is expected to grow slightly this quarter from last quarter’s NT$2.43 billion, the company said.
“We think business will pick up in August and September, bringing the third quarter above the second quarter,” FocalTech chairman Genda Hu said. “We are confident that the second half will be better than the first half.”
Hu’s optimism is due to sales of the company’s new products, which are boosting average selling prices and offsetting weakness in the Chinese market. Hu expects handset sales in China to be flat this year from last year.
FocalTech plans to ship its first chip that integrates an LCD driver and a touch controller this quarter and to ship its first fingerprint sensor within six months. The integrated chip would be a world first, the company said.
In addition to developing new products, FocalTech is also diversifying its customer portfolio to reduce operational risk, Hu said.
South Korea’s LG Display Co, Japan’s Sharp Corp and US action camera maker GoPro Inc are among FocalTech’s new clients, the company said.
Hu said FocalTech is the exclusive chip supplier to GoPro for its action camera and its new camera that can be installed on a plane.
Gross margin would trend up in the second half from last quarter’s 16.8 percent, helped by greater revenue contribution from higher-margin chips such as high-definition driver chips for flat panels, the company said.
The company expects high-definition controller chips to account for more than 60 percent of the company’s LCD driver chip revenue, from last quarter’s 50 percent, while higher-priced mutual-capacitive touch controller chips are set to make up more than 40 percent of total touch controller chip revenue this quarter, from about 40 percent last quarter.
Hu said the company could buy FocalTech stock to help support the share price.
“FocalTech shares are undervalued,” Hu said. “The board is discussing the possibility of launching a share buyback program.”
FocalTech shares rallied 9.8 percent to close at NT$21.85 in Taipei trading yesterday, but the price is still well below the company’s net value per share of NT$29.56 on March 31.
