China’s TCL Expects Profit, Revenue to Double Last Year as New Semiconductor Unit Drives Growth

Publish: 12:52 PM, February 3, 2022

Sino Bangla Online Desk: TCL Technology is forecasting both profit and revenue to more than double last year from the year before on the back of a huge leap in its semiconductor materials business thanks to its recent acquisition of Tianjian Zhonghuan Semiconductor, the Chinese manufacturer of TVs and display panels said yesterday.

Profit is likely to reach as much as CNY10.3 billion (USD1.6 billion), the Huizhou, southern Guangdong province-based firm said in its earnings forecast yesterday. While revenue could expand up to CNY165 billion (USD26 billion).

TCL paid CNY11 billion (USD1.6 billion) to take over Zhonghuan Semiconductor’s parent firm Zhonghuan Electronics Information Group in June 2020 in order to improve its positioning in the semiconductor industry chain. Zhonghuan Semiconductor makes solar monocrystalline silicon wafers, batteries as well as semiconductor materials and devices.

The investment has paid off for TCL, with profit from its integrated circuit business expected to jump more than four-fold last year from the year before and revenue to soar by 80 percent.

By positioning itself in the semiconductor industry chain, TCL has managed to offset a big drop in profitability in its main business of liquid crystal display panels.

The price of panels has been declining worldwide and is likely to continue to drop in the first quarter, analysts aid. TCL unit TCL China Star Optoelectronics Technology is the second biggest TV display panel maker in the world and could be greatly affected by price fluctuations, Rong Chaoping, senior research manager of AVC Revo, told Yicai Global.

The price of 140 centimeters and 165 cm panels fell between USD2 and USD3 this month from last month, while that of 81 cm and 86 cm panels have stayed the same, according to data from market research firm Westview.

But prices are likely to rebound in the second quarter which is the peak season for stocking up, Rong added.

News Source: Xinhua News Agency