FocalTech Systems Co., Ltd. (TWSE: 3545) today (7) held its investor conference to report its consolidated financial results for Second quarter 2026.  

Benefiting from the 618 shopping promotions in China mainland, launches of new smartphone models, and increasing demand for tablets and notebooks, the Q2 shipment in most part of consumer sector showed rather strong increase. Nevertheless, persistently high memory prices continued to dampen smartphone demand, thus the overall market recovery remained moderate.  Quarterly revenue reached NT$2.755 billion, increasing 11.4% QoQ. On a YoY basis, revenue decreased 9.7%, mainly due to lower sales in the smartphone sector. 

Company started raising price on selected products to reflect cost increase in the 2nd quarter. However, due to changes in product mix, gross margin rate in Q2 declined 0.7% comparing to that of Q1. Gross profit was NT$613 million, representing a 7.7% increase from the previous quarter. Operating expenses were NT$777 million, which came mostly from higher R&D expenditure. Supported by investment income recognized during Q2, net profit after tax was NT$131 million, which is equivalent to EPS of NT$0.62.  Net profit increased significantly on a QoQ basis. 

The Company’s financial indices continuously improve in the second quarter. Cash and financial assets increased 8% QoQ, reflecting solid liquidity and financial flexibility. Inventory remained at a healthy level, demonstrating effective inventory management. Meanwhile, accounts receivable declined and shareholders’ equity increased, indicating ongoing improvements in operational efficiency and profitability. These strong fundamentals offers a solid financial foundation for an anticipated moderate but continuing recovery in the second half of the year. 

Looking ahead to the third quarter, demand in the consumer electronics market is expected to remain moderately strong. This is primarily due to the replenishment of low channel inventory. While wafer supply constraints for certain products may limit the overall shipments to a level similar to the second quarter. The Company will optimize the capacity allocation towards products with higher value or strategic importance. As a result of improved product mix and ongoing price adjustments, gross margin is expected to improve further. 

While elevated memory prices pose negative impact on smartphone producers, so is the demand of our touch IC’s for smartphones. Nevertheless, the overall channel inventory pile-up have gradually depleted. Supported by upcoming launches of touch IC’s for new high-end smartphones, shipment momentum is expected to return from the third quarter onward, contributing to a more favorable product mix and better profitability. 

After years of technology development, our driver products for AMOLED panels have been verified and adopted by multiple leading brands. We expect monthly shipments to reach million-unit level by end of the year. Coupled with a healthy gross margins, these products are expected to make a meaningful contribution to both revenue and profit starting the beginning of 2027.

Company’s Waterproof 2.0 technology for touch solution has successfully passed validation test by world leading brands. This demonstrated technological leadership in our IDC (TDDI). FocalTech plans to offer this waterproof technology in conjunction with false-touch prevention and thick cover glass, to support automotive and industrial applications as highest standards in the industry. In addition, a novel Dual Gate IDC(TDDI) solutions help customers simplify supply chains, reduce system costs to gain growth in non-smartphone markets.                      

About FocalTech

FocalTech Group is founded in 2006 and leading 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 and capacitive fingerprint. FocalTech offers TFT LCD / OLED driver IC, touch controller IC, force touch controller IC, integrated driver controller (IDC/TDDI) and capacitive fingerprint IC.

For more information, please visit http://www.focaltech-electronics.com

FocalTech Systems News Release

Spokesperson: Jeff Chang, CFO

Contact：+886-3-666-1660

Email: ir@focaltech-electronics.com