Production/Gross Margin Plummeted in Q2

June Delivery of New Products

 

Flexium, an FPC supplier, saw a 4-month consecutive downturn it embraced the end of May, when it began to pick up by a monthly rate of 4.9%. Its ASP descended because Q2 saw the end of last-generation products, leading to decrease of output and gross profit margins. However, its June products are expected to turn this around and will see a boost in operations in the second half of the year. As an annual outlook, it is estimated that Flexium will end up with double-digit yearly increase, however gross profit margins could be affected due to the impact of increased costs of raw materials.
 

Flexium is expected to have greater visibility in the mobile phone market and is confident it will outshine other FPC suppliers of new American phone models. It has had sweeping success in terms of wireless charging FPCs and optic, front lens and side buttons.

New products will be delivered in June. With its improving quality assurance, Flexium will inevitably see better operations.
 

Flexium remains optimistic about improving the functions of cellphones and is well aware that the demand for thinner FPCs will increase. It is investing more efforts in advancing its designs with its clients as has assumed advantages in its products. In addition, Flexium plans to invest some 1 billion NT dollars in new FPC technologies, including thinner products and those that require new materials and/or new processes. These new products are positioned on the market to be applied areas such as the automobile, electronics, manufacturing, and IoT industries.
 

Flexium’s capital expenditure will be at least 2 billion NT this year. With a new facility in Kaohsiung ready for launch by Q2, production may begin somewhere in the latter half of the year. There are also plans for a newly-established subsidiary in Kunshan and a new facility project for the second half of 2017 and next year respectively. The investment projects will represent both a portion of the capacity of this year’s new products as well as new technologies and R&D in the future.