Touch modules vendor TPK Holding has turned conservative about its fourth-quarter 2020 business results despite impressive revenue and profit gains in the third quarter, and is shifting its focus to medium- and large-size display solutions to counter weakening demand for handset applications.
Freddie Liu, TPK's chief strategy officer, said at the firm's recent investors conference that its revenues from handset applications will shrink significantly in the fourth quarter, as clients are monitoring how the pandemic will affect sales of end devices in the coming one to two months.
Liu said that one of its major clients has adjusted its specs for smartphones and has not placed orders for TPK's touch display lamination solutions. This, coupled with new product transition in first-half 2021, will continue to drive down its revenues from handset applications in the months ahead, he added.
Industry sources estimated its fourth-quarter revenues to drop 20-25% sequentially, given that its October revenues plunged 27.2% sequentially and 46.7% on year to NT$7.71 billion (US$268.64 million).
The company's third-quarter revenues rose 17.1% sequentially to NT$32.85 billion due to seasonal demand and stronger pull-in momentum from clients as smartphone product cycles drew to an end. Net earnings for the quarter swelled 43.8% sequentially to a 10-quarter high of US$443 million, mainly driven by non-operating incomes and foreign exchange gains, according to Liu.
Liu estimated TPK's shipment momentum for 11- to 16-inch notebook applications to linger for a while, with the segment registering the highest revenue ratio, at 41%, in the third quarter, compared to 34% for handsets. Its revenues from tablet applications for the quarter soared 28% sequentially, and those from 16-inch and above display solutions for EV and household fitness applications shot up 62% sequentially.
In terms of new product deployment, TPK CEO Leo Hsieh said its large-size nano silver electronic whiteboards have won good market responses and maintained stable shipments, and the company also started small-volume shipments of small-size offerings to handset vendors in the third quarter.
Article translated by Willis Ke
