TPK to Supply 80% of Apple's Touch Panels for iPhone 4S

Jul 22, 2011 Ι Industry In-Focus Ι Electronics and Computers Ι By Steve Chuang, CENS
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Taipei, July 22, 2011 (CENS)--The Taiwan-based TPK Holdings Ltd., now the world's largest touch panel maker by output, is expected to snap up 70-80% of Apple Inc.'s orders for touch panels used in the upcoming iPhone 4S, securing strong growth momentum for its profits, according to industry insiders.

They noted that TPK, backed by an unparalleled yield rate of 92-93% in production of touch panels, is the world's only manufacturer that can massively turn out such products while guaranteeing quality consistency. The competitive edges give them a good reason to believe that TPK will most likely garner a majority of Apple's contract orders for iPhone 4S touch panels, remaining as the customer's largest supplier of touch panels.

Fueled by contract orders from Apple, the company's gross profit rates and net profits are expected to shoot up this year. Credit Suisse Securities's analysts have projected the company's EPS (earnings per share) for the second quarter of this year at NT$13, with the full-year EPS to hit NT$52.

In the meantime, TPK's hard work on vertical integration will also serve as a growth drive for its gross profits. The company has secured a stable supply source of touch sensors by reinvesting in Cando Corp., a Taiwanese manufacturer of the component, and has also stepped up integrating supply of cover lens. Hopefully, the company will effectively maintain its gross profit rate at a level of between 15% and 18% this year, indicated institutional investors.

On the other hand, TPK's touch panel solutions have also been popular with other globally leading developers of smartphones and tablet PCs. For instance, HTC, Amazon and Barnes & Noble all have asked their contract manufacturers to apply TPK's touch panels in their products. This will surely sustain the growth for the company's sales revenues and profits for the third quarter of this year.
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