Chip designer FocalTech Systems Co (敦泰電子) yesterday posted the steepest increase in quarterly net profit in about three years, benefiting from robust demand for integrated driver and controller (IDC) chips used in tablets and laptops amid the COVID-19 pandemic.
FocalTech expects the momentum to extend into the second half of this year, as infection rates rise around the world and demand for chips used in smartphones recovers due to seasonal factors.
“As the remote working and distance learning trends drive up demand for tablets and notebooks, FocalTech is benefiting from the superior market position that it enjoys,” chairman Genda Hu (胡正大) told investors.
FocalTech is the world’s largest supplier of IDC chips used in tablets, with a more than 50 percent market share.
“Coupled with the arrival of the peak season for smartphones, business in the second half is expected to be stronger than in the first,” Hu said.
Revenue in the first half of this year surged 50 percent annually to NT$5.68 billion (US$192.34 million) and the momentum continued last month as revenue soared 48.86 percent year-on-year to a record NT$1.2 billion, company data showed.
FocalTech said that it has secured orders to supply IDC chips for new models launched by Xiaomi Corp (小米), Vivo Communication Technology Co (維沃) and Motorola Inc.
The company said that wafer supply from foundry companies tightened again last quarter, with the situation likely to stay the same for IDC chips until the end of the year, but Hu said that the company has lined up wafers from more than one manufacturer.
In the second quarter, net profit jumped 70.2 percent to NT$101 million from NT$59 million in the first quarter and a loss of NT$135 million in the second quarter of last year.
Earnings per share rose to NT$0.38, compared with NT$0.24 in the first quarter and losses per share of NT$0.47 a year earlier.
Gross margin improved to 22.16 percent from 21.99 percent in the first quarter — thanks to stable sales prices and an improved product mix — but declined from 22.92 percent in the second quarter of last year.
Cumulative net profit in the first half reached NT$160 million, reversing losses of NT$329 million in the same period last year.
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