Touch panel manufacturer GIS has faced significant operational challenges in 2024. Despite a rebound in consolidated revenue during the third quarter, the company's product mix resulted in a reduced gross profit margin. As GIS's market share in fingerprint recognition continues to expand, the company expects overall performance in 2025 to surpass that of 2024, with fingerprint recognition revenue projected to exceed 10% for the first time.
Despite a sluggish consumer market, new product launches by major US clients drove shipment growth, with the annual peak occurring in the third and fourth quarters. However, traditional peak-season growth remained moderate. In the third quarter, tablets accounted for 61% of revenue, notebooks and other product lines 29%, and mobile phones 10%.
GIS's revenue in the third quarter reached NT$18.37 billion (approx. US$566 million), a 13.0% quarter-over-quarter increase and a 5.6% year-over-year increase. However, the reduced shipment share of fully integrated products negatively impacted the product mix, lowering the quarterly gross margin to 6.0%, down by 0.7pp from the previous quarter but up 2.6pp year-over-year.
The core business posted an operating loss of NT$350 million, an increase from the previous quarter, though narrower than in the same period in 2023. Thanks to non-operating income, post-tax losses were NT$64.7 million, a reduction in losses compared to both the previous quarter and the same period last year.
The company notes that weak consumer demand and reduced shipments of high-end models in the second half have slowed the recovery of its gross profit margin. Nonetheless, shipments in the fourth quarter are expected to perform slightly better than in the third quarter, supporting the view that the second half will show improved growth over the first.
Looking ahead to 2025, GIS anticipates stable performance in its core touch business, with growth driven by new product shipments. Fingerprint recognition shipments are set for substantial growth. In capacitive fingerprint recognition, although GIS is a later entrant, product quality has improved, leading to a higher supply share among brand clients.
Capacitive fingerprint shipments are expected to increase significantly in 2025. Ultrasonic fingerprint recognition products are projected to continue steady growth, with GIS poised to expand its client base to include more Chinese mobile brands beyond existing clients like Samsung Electronics, broadening its footprint in the ultrasonic fingerprint recognition market.
In 2024, fingerprint recognition products accounted for nearly 10% of GIS's revenue, with the share expected to exceed 10% in 2025, driven by growth in shipment volume.
For the first three quarters of 2024, GIS reported total revenue of NT$49.73 billion, a 5.1% decline year-over-year, with a gross margin of 7%, an increase of 4.2pp. Operating losses reached NT$550 million, with an operating margin of -1.1%, an improvement of approximately 5.6pp year-over-year. Post-tax losses were around NT$100 million, narrower than the same period in 2023.
In 2025, GIS plans to continue diversifying beyond its core touch business, driving growth through new applications, including automotive solutions, in collaboration with the Foxconn Group. The company is also optimistic about the optical field, particularly augmented and virtual reality, which it sees as a key growth area for the future.
Article translated by Heidi Tai
