Touch panel maker J Touch expects revenues for the second quarter of 2011 to increase 40% from NT$1.195 billion (US$40.2 million) recorded in the first quarter, according to the company.

This is mainly because many clients have delayed shipments of touch panels used in tablet PCs from the first quarter to the second due to competitive pressure of iPad 2, the company indicated.

Due to impact of transforming production from resistive touch panels to capacitive models, J Touch saw first-quarter 2011 gross margin drop to 12.38% and net EPS to NT$0.11 as compared with 19.69% and NT$1.13 posted a year ago. Currently, yield rates for capacitive touch panels used in handsets and tablet PCs stand at 75-80% and 65-70% respectively, while those for resistive models exceed 85%. J Touch expects to hike the proportion of total revenues for capacitive touch panels to 80% by the end of 2011.

J Touch has set aside a capex budget of NT$2 billion for 2011, with NT$1.8 billion to be used to expand production capacity in central China and NT$200 million for expansions in Taiwan.