LED automotive lighting module maker Laster Tech expects to post sequential revenue increases through the fourth quarter of 2022, with revenue for the year registering a 13-15% surge compared to 2021.
Laster attributed the growth to strong orders from China-based automaker customers and favorable policies of local governments.
Laster's shipment rate was impacted by the COVID-induced lockdowns in China back in April-May. In June, its Shanghai plant's rate stood at 75%, putting pressure on the company's operational costs. Laster Tech's Taiwan Guanyin and China Dongguan plants were able to maintain shipments. Second-quarter operational costs ate up first-quarter profits, which amounted to NT$15 million (US$500,343).
Laster's second-quarter gross margin was lower than the first quarter by 12.17%, according to market estimates. The lockdowns in China also affected second-quarter and first-half losses.
Laster attributed the decline in gross margin in recent years to the shortage of automotive chips.
Laster has recently added headlight companies Hella and ZKW to its list of customers in hopes of adjusting its customer supply ratio. Coupled with improvements in chip supply and logistics, as well as increasing material costs to customers, Laster aims to increase gross margin to 17-18%.
Laster will make adjustments to its second production line at its Taiwan Guanyin plant in August, which is expected to enter production in October. The lighting controllers at the Guanyin plant are produced via high-speed automation and shipped to US automakers. Monthly output for October-December is expected to reach NT$100 million and is expected to increase to NT$140 million per month in 2023. Laster hopes to increase gross margin to 9-10%, up from the current 8%.
Tail lights are Laster's main product, with LED headlights accounting for 27.13%. In recent years, more future vehicle brands, such as China-based Great Wall Motor and Geely, have started using LED lights, which accounts for 25% of Laster's overall performance. It has also obtained new orders through its customer Hasco Vision.
Starting in July, Laster's automotive lighting module orders have been filled by China-based customers. Although the car chip shortage has eased at the Taiwan Guanyin plant, its China factories are still in short supply. Second-half operational growth will depend on chip supply.
Laster expects its growth rate in 2023 can achieve 15-20%.
Article translated by Eifeh Strom
