Affected by the off-season and the weak global economic growth, TPK, a prominent Taiwanese touchscreen panel manufacturer, saw a revenue decline in Q2 2023, which resulted in minor losses. However, the company expects a 5–10% growth in revenue for the second half of the year, driven by its major clients halting their inventory adjustments, new product launches, and stabilized notebook shipments. The company expects to break even on its operating revenue.
In recent years, TPK has been actively expanding into new business domains. TPK's president, Leo Hsieh said that LiDAR modules from collaboration with Luminar have entered the validation phase, and they're set to be shipped out starting Q4 this year, and since there will be more than one model, the LiDAR modules are expected to contribute greatly to the company's growth in 2025. What's also going to be shipped in Q4 are the cholesteric liquid crystals developed with Iris Optronics. 3D printing and other new ventures are also expected to make up 5% of revenue in 2024 and potentially 10% in 2025.
TPK's Q2 revenue was NTD$16.229 billion (USD$51.07 million), a decrease of 6% QoQ and 27% YoY, with an operating loss of NTD$142 million, despite its profit margin being 3.9%, the same as Q1. The company was still able to have a net profit of NTD$32 million due to its non-operating income, which includes net interest income of NTD$130 million, foreign exchange gain of NTD$54 million, and government subsidies of NTD$78 million.
Ongoing weak consumer demand has affected the market for tablet computers. Compared to Q1, revenue from 7–11 inch products decreased by 17.9%, and a 26.5% decline from products smaller than 7 inches. The latter is a result of clients stocking up on new e-ink devices in Q1 and older smartphones being at the end of their product cycles.
The good news is that demand for notebooks has stabilized. 11–16 inch and 16+ inch notebook computers all had QoQ revenue increases. The former's was 9.6% and the latter's was 32.7%. On product portfolio, according to TPK, even though 11–16 inch products took up more share in Q2 than in Q1, there is still a sharp decline compared to the share they took up in the same period in 2022. This shows that its clients are adjusting stocks at the end market.
Although July's revenue reached NTD$ 6.298 billion, an increase of 19.6% MoM, it was a 36.6% YoY decrease. TPK expects growth of 5–10% in the second half of this year compared to H1, which is a result from lowered cell phone shipments, stabilizing notebook demand in Q3, and new tablet launches in Q4. The company estimates a breakeven from operating income and expenses in Q3.
TPK's board recently approved the establishment of a production plant in Thailand for automotive display systems. The Thailand facility is expected to begin production in July 2024, integrating touch control and display products with communication. The move to Thailand is part of TPK's strategic shift to exploit future growth potential and tap into Thailand's more robust automotive electronics supply chain.
Article translated by Julie Chang
