TPK Holdings Co (宸鴻), which supplies touchpanels for Apple Inc’s iPad, aims to cut its operating expenses by 2 percent to 5 percent over the next three months at the earliest as new TPK chief executive officer Michael Chung (鍾依華) plans to get the firm out of the woods.
“It will take three to six months to hit the target,” Chung told a media gathering yesterday after his appointment was approved by the company’s board earlier in the day.
TPK booked NT$2.48 billion (US$81.31 million) in operating expenses for last quarter, down slightly from NT$2.64 billion a quarter ago.
Photo: CNA
To improve operating expenses, Chung said the priority would be to boost the production yield of its new touch-on-lens technology, which would help save material and labor costs. Yields are not yet stable, only hitting 80 percent occasionally, he said.
Chung is taking the helm from Tom Sun (孫大明), who was yesterday promoted to vice chairman.
However, TPK reported quarterly losses of NT$241 million in the past quarter after its operating profit margin fell into negative territory, at minus-1 percent, for the first time in the company’s history.
An increase in labor costs and unfulfilled customer orders also led gross margin to fall to an all-time low of 6.6 percent last quarter from 8.9 percent in the previous quarter and 12.4 percent a year ago.
The company has experienced ups and downs in its business since Apple stopped using its touchpanels when it introduced its iPhone 5 series in 2012.
Chung, 53, worked for Hon Hai Precision Co (鴻海精密) for 15 years and was in charge of smartphone assembly for Apple. His new job at TPK has triggered speculation that the firm may gain more orders from the US electronics giant. Hon Hai is a major iPhone assembler.
“TPK has never dropped out of Apple’s [supplier list],” company chairman Michael Chiang (江朝瑞) told reporters.
“Since TPK produced the first touchpanels in 2007, the company has not made a major change in management… We need to be more aggressive,” Chiang said. “We hope Chung can help the company improve operating efficiency by cutting expenses by 2 percent to 5 percent.”
To enhance profitability, Chung said the company would revamp its business structure by dividing the company into several units, either by product or by customer, with each of them becoming a profit center in the future.
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