Quartz component maker TXC expects sequential growth in revenues for the fourth quarter of 2010 thanks to stable orders from handset customers. However, with the strengthening NT dollar and cool notebook demand, TXC has lowered capacity utilization at its plant in Ningbo, China, and analysts are predicting a 2-3pp decrease in gross margin in the fourth quarter.
Emerging from a weak third quarter, demand from notebooks and desktops has gradually recovered in October and November. With overall demand still down, TXC lowered utilization at its Ningbo plant to 70-80% in October, but has since brought it back up to above 80% in November.
Order visibility for 2011 is low at the moment, TXC indicated, but added that the first quarter is typically the low season. The company will focus on developing handset clients, and growth will be fueled by the introduction of new handsets.
TXC's revenues for the first quarter of 2011 will fall 8-10% sequentially due to seasonality, according to analysts. With strong orders expected from handset clients, TXC's 2011 revenues should easily top NT$10 billion (US$332.67 million).