Technology Mobiles and Tabs 23 Oct 2018 Launch of new iPhone ...

Launch of new iPhones helps chipmaker AMS's profit surge

REUTERS | DECCAN CHRONICLE
Published Oct 23, 2018, 8:27 am IST
Updated Oct 23, 2018, 8:29 am IST
AMS does not identify its customers, but this was believed to be a reference to Apple. (Photo: StartUs)
 AMS does not identify its customers, but this was believed to be a reference to Apple. (Photo: StartUs)

Austrian chipmaker AMS AG reported a 49 per cent increase in its third-quarter core profit and gave an upbeat forecast for the next period, largely because Apple started mass production of new phones that include its sensors.

AMS is highly exposed to the smartphone and tablet markets and investors hope that new products launched in the second half of 2018 will lead to higher sales next year.

In particular, they hope for good sales of Apple’s three new iPhones, which analysts think all include AMS’s face recognition sensors. Analysts estimate that Apple accounts for around 40 per cent of AMS sales.

AMS said third-quarter adjusted earnings before interest and tax (EBIT) reached USD 60.2 million or 13 per cent of revenue from USD 40.5 million last year. The margin is expected to rise to 16 to 20 per cent in the fourth quarter.

“This expected positive result reflects the ramp-up nature of the quarter given increasing production volumes for a recently launched global smartphone platform,” AMS said in a statement, adding it was making “very high volumes” for the programme.

AMS does not identify its customers, but this was believed to be a reference to Apple.

Revenues in the quarter reached USD 479.6 million (2017: USD 305.5 million) and are expected to rise to USD 570 to USD 610 million in the three months through December, AMS said.

The optimism is also based on the fact that it has started to produce 3D face recognition sensors for two Android customers, the Swiss-listed company said.

China’s Xiaomi, the world’s fourth-biggest smartphone maker, is one of them.

Credit Suisse analysts think that Huawei’s new Mate20 Pro phones also use AMS’s sensors for its face recognition feature, which would add the second-biggest smartphone maker to AMS’s customer's list.

The group said it was working on sensors that are capable of scanning surroundings in 3D, so-called world-facing 3D sensors, for a major smartphone manufacturer. Analysts have suggested that Apple could be working on such a project to assert dominance in augmented reality.

AMS has been focussing on four businesses: optical sensors, such as the ones used in the new iPhones, image sensors for applications in self-driving cars, audio sensors such as microphones and environmental sensors, which detect temperature or moisture.

In the future, it will reduce its efforts in environmental sensing and instead strongly focus on “very attractive mid- and long-term growth opportunities in optical technologies,” the group said.

“This includes new areas of innovation such as photonic elements and photoacoustic structures.”

Details will be announced with fourth-quarter results.

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