Largan Precision, the world’s leading smartphone camera lens manufacturer, suffered its worst quarterly performance in over a decade as Taiwan’s surging currency wiped out NT$4.22 billion (US$144.32 million) in foreign exchange gains during the second quarter.
The Taichung-based company’s earnings per share collapsed 84% to NT$7.73 (US$0.26), marking the weakest quarterly result in 13 years. Net profit tumbled to NT$1.03 billion (US$35.2 million) from NT$6.43 billion in the previous quarter, according to company filings released Wednesday.
The New Taiwan dollar’s 10.96% appreciation against the greenback in the second quarter devastated Taiwan’s export-heavy technology sector, with Largan becoming the first major tech company to reveal the full extent of currency-related damage during earnings season.
Chairman Lin En-ping acknowledged the currency impact, noting that the sharp appreciation of the Taiwan dollar shaved about 2 percentage points off the company’s gross margin last quarter. The company estimates that every 10% strengthening of the Taiwan dollar erodes gross margins by 4-5 percentage points.
Despite the currency headwinds, Largan maintained a gross margin of 53.6%, down just 1 percentage point from the previous quarter and better than analyst expectations. The resilience reflected strong demand from major clients launching new smartphone models with higher-value camera components.
Taiwan’s currency has experienced unprecedented volatility, with the Taiwan dollar surging over 10% against the US dollar in recent months as markets speculated about potential trade negotiations with Washington. The rapid appreciation has pressured Taiwan’s export-heavy tech sector, as a stronger local currency makes goods expensive for foreign buyers.
Largan, which supplies camera lenses primarily to Apple and other major smartphone manufacturers, maintains NT$115.3 billion (US$3.94 billion) in cash reserves. Lin said the company plans to maintain equal proportions of US dollars and Taiwan dollars to hedge against future currency fluctuations.
The earnings reveal the broader challenges facing Taiwan’s technology giants, who generate most revenues in US dollars but face mounting pressure from the strengthening local currency that threatens their global competitiveness.
