GIS Earnings Call: Memory Shortage Drags First-Half Performance; Momentum Rebounds in Second Half, Q4 to Outperform

Touch module manufacturer GIS-KY (6456-TW) held its online corporate briefing today. CFO Lin Yuan-Ping stated that due to market-wide memory shortages suppressing end-market demand, the company recorded a post-tax net loss of NT$1.257 billion in the first half, equivalent to a loss of NT$3.76 per share. However, as component shortages gradually ease, monthly revenues in July and August have rebounded to approximately NT$4 billion. The company expects operations to emerge from their trough in the second half, with quarterly revenues projected to show sequential improvement in both Q3 and Q4.

Reviewing first-half performance, customer procurement delays for laptops and tablets led to consolidated revenue of NT$26.5 billion, down 22.3% year-on-year. Gross margin declined to 4.3%, and operating loss reached NT$1.124 billion. Quarterly revenue in Q2 further contracted to NT$1.05 billion, a 34.7% decline quarter-on-quarter. Due to the inability to effectively absorb fixed costs, coupled with tax expenses related to repatriating earnings from its mainland China subsidiary, the quarterly loss per share widened to NT$3.15.

Looking ahead to the second half, Lin noted that operational performance in July and August has already surpassed the average monthly revenue of approximately NT$3 billion seen in Q2. As memory shortages continue to improve, Q3 revenue is expected to exceed Q2 levels, with this easing trend likely to extend into Q4, driving Q4 revenue further above Q3.

Regarding Sharp’s closure of its Guishan Plant II at the end of August, Lin acknowledged that this move significantly impacts the supply source for thin-film transistor liquid crystal (TFT-LCD) display panels and downstream module operations. However, the overall market shift toward OLED remains unchanged. The company had foreseen this trend and proactively initiated adjustments and transformation earlier. Its core touch lamination business remains unaffected, and it is now actively seeking a second supplier to diversify material sourcing risks.

In the first half, tablet-related revenue accounted for 44%, notebooks 32%, fingerprint recognition modules 15%, and other products 9%, with overall proportions remaining stable. The company continues to advance its transition from traditional touch display modules to semiconductor optical process components, including micro-LED and automotive optical elements, laying the foundation for mid-to-long-term operational transformation.