Taiwan-based lens manufacturer Largan Precision held an online earnings call on July 10, during which it explained that exchange rate fluctuations had a significant impact on the company in the second quarter of 2025. The company previously predicted that the New Taiwan dollar would appreciate by 10%, affecting the second-quarter gross margin by 4-5%. However, pull-ins for new devices had already begun at favorable pricing, resulting in an actual impact of around 2%.
Limited tariff impact, but rare earth controls affect operations
According to Largan, the impact of tariffs was limited since it does not ship directly to the US. However, controls on rare earths by China in the second quarter did have an impact, with shipments halted for a short period, but it has since returned to normal in the third quarter of 2025.
Production remains at full capacity despite growing competition
Largan's production capacity continues to be fully loaded, similar to previous years. In 2024, some major device models were supplied exclusively by Largan, but competitors are expected to continue catching up in 2025.
Overseas expansion faces challenges
Regarding overseas deployment, company executives stated that leaving Taiwan would not be easy. Largan is still scouting locations to build overseas facilities, with the primary considerations being labor quality and the ease of obtaining land.
Variable aperture technology drives future growth
The company spent considerable time discussing variable aperture technology during the call. While Largan already has some small projects, demand is expected to become more significant in 2026, with larger projects on the way that will be shipped out in modules. Due to the specification upgrades, the price of variable aperture products will be higher, but the gross profit will be lower.
Financial performance shows mixed results
Largan posted a second-quarter revenue of NT$11.67 billion (US$399.49 million). The gross margin in the second quarter was 53.6%, while the net income fell 84% from NT$6.44 billion in the first quarter to NT$1.03 billion. The exchange loss in the second quarter amounted to NT$422 million. The gross margin for the first half of 2025 was 54.1% and the net profit totaled NT$7.48 billion.
Article edited by Jerry Chen
