Despite a customer's commitment to switch its sourcing of smartphone LCD modules to a lower-cost supplier, Nam Tai Electronics (NYSE:NTP) announced today that the customer sent in a new purchase order for an additional 15 million units.
The new order extends production through September and there are no guarantees additional orders will be received, the company said, noting also that the unnamed customer could cancel the order with payment of a cancellation fee.
Last month, Nam Tai reported disappointing earnings and announced it might have to halt production in June at its Shenzhen and Wuxi facilities until the market stabilizes. The new order will give the Shenzhen facility only temporary relief. The company has said its profits could come under increasing pressure as it may have to cut prices and it may have to end some manufacturing services if conditions don't take a turn for the better.