Largan’s margin lower after axed order

CHANGING MARKET: As many handset vendors equip their phones with lower-range lenses, pressure on the manufacturer is growing, adding to foreign exchange losses

Taipei Times
Date:  Oct 09, 2020
By: Kao Shih-ching / Staff reporter

Largan Precision Co chief executive officer Adam Lin is pictured in Taipei on June 12 last year. The company yesterday reported that gross margin for last quarter declined due to order losses and said it had a conservative view about this quarter.
Photo: Chen Mei-ying, Taipei Times

Largan Precision Co (大立光), the nation’s leading camera lens manufacturer, saw its gross margin slide to 65.6 percent last quarter, from 68.6 percent a quarter earlier, after a major client canceled its orders, chief executive officer Adam Lin (林恩平) said yesterday.

“The client directly canceled all of its orders last month, which lowered our gross margin, as the client had requested high-specification orders with higher profit margin,” Lin told investors at an online earnings conference.

Lin did not name the client, while market speculation was that it was Chinese telecom equipment provider Huawei Technologies Co (華為), whose manufacturing has been disrupted by a US’ ban, demanding suppliers to stop shipping to Huawei if their products contain US technology.

Largan has been talking with other clients to inquire if they are interested in placing more orders, but it would be “highly unlikely” that any new orders would be large enough to fill in for the allocations that were previously saved for the client, Lin said.    [FULL  STORY]

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