Smartphone Lens Maker Largan to Build Factory in Central Taiwan to Vie for Bigger Market Share

Largan Precision Co., Ltd., recognized as the world's biggest manufacturer of smartphone lenses with share prices on the TAIEX of Taiwan sometimes eclipsing US$82 to be the most costly on the island, has announced to begin building a factory sometime in the first quarter for some NT$20 billion (US$645.16 million) after signing a contract with Kedge Construction Co., Ltd.

Largan Chief Executive Officer (CEO) E.P. Lin points out the company needs to boost capacity to take bigger market share so as to fortify its No.1 position.

The factory, whose land was acquired October 2014, is projected to be completed by 2016 and start pilot production by early 2017, being located in the Taichung Precision Machinery Science and Technology Innovation Park in central Taiwan, near the company's headquarters.

Lin says the factory will still make zoom lens for cameras in smartphones, a market it has around 20 percent share.

Before the factory is completed, the company has been leasing factory to set up extra production lines to handle flooding orders.

Lin points out that this year demand for smartphone camera lenses featuring high pixel, zoom, twin lens, image stabilization, and large aperture will surge considerably.

Although Lin feels corporate sales to decrease in Q1, 2015 from the previous quarter due to seasonal factor, but predicts sales in the first two months of the first quarter to increase from the same months of last year, which has prompted industry executives to forecast the company's sales for the quarter to slump around 30 percent from Q4, 2014, to approximately NT$12 billion (US$387.09 million)

Industry executives put the company's after-tax net income at NT$180 (US$5.80) or so per share for 2015 based on the uptrend of twin-lens module necessary for higher resolution, which will push up the company's average selling price (ASP).

Throughout 2014, the company's after-tax net income rose to a new high of NT$19.43 billion (US$626.77 million), or NT$144.85 per share, with Q4, 2014  net income of NT$55.43 per share, mostly due to record sales of Apple iPhone 6, which has lenses supplied by Largan. 

(KL)