GPI Acquires Large Orders from Samsung

Genesis Photonics Inc. (GPI), a subsidiary of the Chicony Group, recently announced at an investors’ conference that the company received big flip chips order from Samsung, and flip chips will account for 25% of the company’s 2015 overall revenue, according to an Economic Daily News report.

GPI has been working on flip chip technology to expand in high-powered LED market and access streetlight and automotive markets, said Genesis Photonic’s spokesperson York Lin while attending Gfortune Securities Industry Forum. Currently flip chips are applied in LED lighting, mobile and TV backlight. Flip chips currently accounted for 10%-15% of the company’s overall revenue and is expected to rise to 20%-25% next year. The company’s gross margin is thus expected to greatly improve.

Flip chips will be applied to mid-powered products next year and low-powered products the following year, said Lin. High-power features allows flip chip applications in large screen high resolution TV backlight, streetlight and automotive market. The company products are currently being applied by certain Japanese TV brands, and is expected to benefit from the launch of new TV products next year. In addition, the company has gained access to automotive market as an Original Equipment Manufacturer (OEM), and might experience immense growth in the future. 

GPI’s revenue is expected to reach rock bottom in 4Q, but will definitely bounce back in coming year, said company Chairman David Chung. Since the company has received Samsung TV orders and Japanese smartphone orders, revenue growth in December is expected to outperform the previous month, while revenue for January next year will surpass December 2014 revenue. The company is seeing a quarterly growth of 10% in 1Q15.

Flip chip is the future trend, said Chung. The advantage of flip chip is higher current can be applied to the chip since the current transmission is more stable. It is also free of thermal dissipation issues, resulting in the chip’s longer life expectancy. Korean TVs will fully adopt flip chips in near future. Moreover, flip chips are rumoured to be applied in Apple iPhone 7’s mobile backlight.

GPI has improved quarterly gross margin, with 13.1% first quarter, 16.3% second quarter and 20.3% third quarter. The company’s blue LED gross margin is higher than Epistar, said the CEO.

AOT’s Revenue to Rebound in 4Q

Foxconn Group-owned AOT’s revenue in 3Q declined since Samsung mobile sales underperformed. The company’s share tumbled more than 50% since July. Since the inventory adjustment is nearly over, clients might start placing orders during 4Q, hence AOT’s gross margin is expected to rebound in 4Q while profit is also expected to exceed 3Q, said AOT’s General Manager Rongxi Fang

AOT plans to launch new products in 2Q15. The company is seeing growth in LED lights and UV chips productions next year, and the company’s performance is expected to be better than this year, said Fang.

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