FocalTech Systems Co., Ltd. (TWSE: 3545) today (11) held its investor conference to report its consolidated financial results for Second quarter 2023.
With the inventory level at cellphone makers continues to drop, the demand increased slightly in the second quarter comparing to the previous quarter. However, due to further price drop of IDC (TDDI), the revenue in the second quarter showed a slight decline. The revenue in the second quarter was NT$3.112 billion, a decline of 3.5% QoQ and 6.5% YoY.
In the second quarter, due to a better product mix and the effect from production cost control, the gross profit margin rate rises to 20.5%, an increase of 1.7% from the previous quarter. The gross profit amount also increased to NT$638 million or by 5% from the previous quarter.
Owing to improved gross margin, the operating profit also showed a slightly better result than the previous quarter in spite of R&D expense increased in the 2nd quarter. At the same time, benefiting from non-operating income, the net profit in the second quarter was NT$103 million and the EPS was NT$0.51, an increase of 105% from the previous quarter or 15.7% increase from the same period last year.
The mobile phone market has not shown signs of recovery in the near future, so IDC (TDDI) lacks growth momentum. However, as the market share of AMOLED panels produced by mainland manufacturers increases, the shipment of FocalTech’s AMOLED Touch controller IC will also increase accordingly. Under the combined influence of the above two situations, it is expected that the revenue in the third quarter will be similar to the second quarter, but the overall revenue in the bottom half of this year will be better than the 1st half.
AMOLED display panel widely used by high-end cellphones is going through a major change from rigid GOLED panel to a more flexible POLED panel. At the same time, The Market share of the POLED panels used to be dominated by Korean manufacturers is also being surpassed by China mainland manufacturers. FocalTech’s Touch Controller IC are gaining market shares during this transition. We are expecting a growth in touch controller revenue going forward, and become more noticeable in the 4th quarter of the 2023.
At end of the second quarter, the company inventory is significantly reduced to a 12-month low. However, as new products are preparing for launch, it is expected that the overall inventory may start to level off or even increase slightly in the 3rd quarter.
Due to the potential further price drop of IDC (TDDI) and the large variation on product mix of the shipment, it is difficult to accurately predict the gross profit margin in the next quarter. FocalTech is continuing to minimize manufacturing cost on all fronts in order to reduce the impact from price variation in the market.
About FocalTech
FocalTech Group is the leader in human and machine interface technologies, providing solutions for sensing and display. FocalTech has strong capabilities in α-TFT, LTPS, and OLED display driver design, capacitive 2D/ 3D touch controller/algorithm, ITO sensing pattern, capacitive/optical fingerprint/physiological measurement algorithm. FocalTech offers TFT LCD / OLED driver IC, touch controller IC, force touch controller IC, integrated driver controller (IDC/TDDI), capacitive and optical fingerprint IC. For more information, please visit http://www.focaltech-electronics.com
