Korean dominates optical trackpad biz

Industry

Published: 17 Jul. 2011, 22:08

Korean dominates optical trackpad biz

A BlackBerry with an OTP. Provided by CrucialTec

HANOI, Vietnam - These days, touchscreens are the rage in the world of technology. But one Korean company is dominating the competing technology: optical trackpads (OTP).

CrucialTec is the dominant worldwide producer of optical trackpads, enjoying a 95 percent share of the OTP market. Technically, OTPs are slightly different from the trackpads on laptops, but function in the same way.

One of the company’s biggest clients is Canada’s Research In Motion (RIM), maker of the BlackBerry. U.S. President Barack Obama is often photographed using a BlackBerry, and its latest model ditched its signature trackball and replaced it with a CrucialTec trackpad. The company’s other clients include Taiwan’s HTC and Korea’s Samsung and LG Electronics.

CrucialTec’s beginnings were humble when it was founded in 2001 with capital of just 100 million won ($94,480). Fast forward nine years to 2010, and the company posted revenues of 208.1 billion won.

This year, as CrucialTec celebrates its ten-year anniversary, the company has expanded overseas. Earlier this month, it opened a plant in the capital of Vietnam. It is CrucialTec’s second plant after one in Asan, South Chungcheong, and its first overseas.

CrucialTec spent $12 million to build facility.

CEO Charles Ahn says labor costs and geographical advantages prompted the company to open the Vietnam plant. He says CrucialTec has no shortage of orders despite the rising popularity of touchscreen-based devices like the iPhone, and is aiming for 1 trillion won in sales by 2013. Ahn originally worked on nano technology at the Samsung Advanced Institute of Technology.

Q. Tell us why you chose Vietnam?

Charles Ahn

A. Labor costs and tax benefits were the biggest charms. The labor force here is high quality, so we expect productivity similar to Korea’s. Yet the labor costs are just $150 a month [per worker].

Also, we are entitled to an exemption on corporate tax for four years. Afterwards, we will get a 50 percent-discount on tax for nine years. With all these, we expect our operating profit margin to increase by three to four percentage points.

Logistics also factored into our decision. Vietnam is close to China, the world’s largest market. It takes us just a day and a half to deliver by truck to Shenzhen in southern China. So there is also the geographical advantage.

What’s your response to concerns that your reliance on sales of the BlackBerry is too high?

We are planning to diversify our clients. Currently, businesses from RIM accounts for 64 percent of our business, but we are aiming to reduce that by about 10 percentage points in the medium term.

We hope to expand business from Samsung Electronics from five percent to 20 percent, and also increase business from HTC.

Touch-based smartphones are the rage. And that is why some say the future of the OTP market is uncertain. What are your thoughts?

Have you tried navigating through touch-based smartphones, struggling to touch on letters and Website links so small? If you use OTP, such tasks get much easier. Smartphones need OTP.

And smartphones are hardly the only devices that can adopt OTP. Low-end, non-smartphones are increasingly opting for OTP as well as remote controls for smart TVs.

The fact that sales of CrucialTec have grown steadily proves that it’s not true that the future of OTP is murky. We posted 70.1 billion won in sales in the first quarter of this year, up 136 percent on-year. At this pace, we expect to log 350 billion won in sales this year.

We recently succeeded in developing a semiconductor that can run both touchscreen and OTP simultaneously. In addition, we developed a new touchscreen that is different from the existing touchscreen. It can be used in smartphones and tablet PCs.

By Seo Ban-seok, Kim Hyung-eun [hkim@joongang.co.kr]