Wed, Aug 24, 2011 - Page 12 News List

E Ink eyes record third-quarter revenue

WHAT MATTERS MOST:The firm’s chairman said that in his experience, people were more likely to cut back spending on luxury goods than items related to entertainment

By Lisa Wang  /  Staff Reporter

E Ink Holdings Inc (元太科技), which supplies 90 percent of the world’s e-readers with displays, expects to post revenues this quarter that are greater than its record-high NT$10.1 billion (US$345 million) in the first quarter, a company executive said yesterday, citing a minimal impact from global economic uncertainties on the sales of tablet devices.

“Our business is gathering steam ... Customers usually roll out new products this quarter or next,” E Ink chairman Scott Liu (劉思誠) said at an investors’ conference yesterday. “I have greater confidence now than a month ago since we’ve secured more orders than we expected. It [demand] is solid; not just customer forecasts.”

Liu added that in his experience, consumers were more likely to cut spending on luxury items, such as cars, than entertainment activities like reading.

“We have also obtained customers’ detailed forecasts for the fourth quarter because they want to ensure sufficient supply, which makes us quite optimistic [about the fourth quarter,]” Liu added.

When asked about the impact of Amazon.com Inc’s — an E Ink customer — rumored plan to sell tablet devices, Liu said E Ink would be a good choice for Amazon to source LCD panels because his firm already has the high-resolution LCD technology that is used to make screens for tablets, including Apple Inc’s iPads.

Fueled by strong demand in the historic peak season, E Ink has a chance to increase its revenues to more than the NT$10.09 billion it made in the first quarter, of which 80 percent came from e-paper displays, Liu said.

Gross margin would be stable at about 30 percent this quarter, Liu said. E Ink’s gross margin improved to 32.5 percent last quarter from 28.9 percent in the first quarter. Revenues plunged 31 percent last quarter to NT$6.93 billion as tablet device makers reduced orders.

This month, revenues were likely to grow to more than NT$3 billion, paving the way for the company to reach its goal of posting record-breaking revenue figures, Liu said. This would represent at least a 5 percent increase from NT$2.85 billion in revenue last month.

Liu said his forecast for global e-reader shipments this year was between 25 million units and 30 million units, following an upward revision from previous estimate of between 20 million and 30 million units in shipments.

This would mean an annual growth rate of at least two-and-a-half times last year’s shipments of 10 million units.

“Growth from European markets will be crucial this year as Amazon has entered the UK and Germany, and it plans to tap into more countries,” Liu said.

Shares of E Ink climbed by the 7 percent daily limit to NT$62.5.

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