Prime View International Co (元太科技), which supplies e-paper displays used in e-readers including Amazon’s Kindle, yesterday said it planned to more than triple its capital spending this year to cope with fast-growing demand.
The investment is part of Prime View’s five-year plan to expand capacity 14-fold, the Hsinchu-based company told investors at a conference in Taipei.
The expansion also reflects Prime View’s optimism about the e-reader market this year as a growing number of global publishers and electronic device makers are following in the footsteps of US online book store Amazon to enter the e-reader market, the company said.
Prime View supplies e-paper displays using technology from E-Ink Corp, a company it acquired last year. E-Ink outpaced peers such as Sipix Technology Inc (達意科技) in mass producing e-paper displays for customers. Sipix is a subsidiary of Taiwan’s top flat-panel maker AU Optronics Corp (友達光電).
“Our expansion is based on forecasts from our customers,” company chairman Scott Liu (劉思誠) said. “This year, there will be at least 50 new e-readers hitting the market, most of them using E-Ink technology.”
Prime View also supplies e-paper displays to Sony Corp and Barnes & Noble Inc, the biggest bookseller in the US.
To catch up with growing demand, Prime View planned to spend between US$50 million and US$60 million on new equipment to double capacity, Liu said. Last year, the company budgeted more than NT$500 million (US$15.63 million) for new machines.
Overall, global e-reader shipments may exceed market forecasts of 10 million units this year, Liu said.
One key reason is some companies such as Sony plan to launch low-cost e-readers, which will be outfitted with smaller displays of about 5-inches, with a retail price of less than US$200 per unit, Liu said.
“The US$200 price level could hit the sweet spot to trigger tremendous market growth,” Liu said.
Prime View also planned to launch flexible and colored e-paper displays after overcoming technological barriers, Liu said.
Market researcher Topology Research Institute (拓墣產業研究所), based in Taipei, projected e-reader shipments may more than double to 91 million units this year from last year’s 35.5 million.
Addressing recent concerns about competition from Apple Inc, Liu said he believed the launch of Apple’s tablet PC, or iPad, would not jeopardize e-reader sales, saying the iPad is equipped with a TFT display, which is less suitable for text reading, and other short comings like shorter battery life and extra costs for 3G wireless Internet connection.
The company led local rivals in cranking out the first thin-film-transistor displays about 14 years ago. Now the company is shifting away from the volatile and capital-intensive thin-film-transistor display industry to focus on a thriving e-reader market.
Liu said company net income grew more than four-fold in the fourth quarter, compared to NT$57 million in the third quarter.
The company may earn around NT$285 million for the quarter ending Dec. 31.
Shares of Prime View jumped 6.88 percent yesterday to NT$63.7, ahead of the investors’ conference.
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