E-paper display maker E Ink Holdings Inc (元太科技) yesterday said its board had approved a plan to buy out local rival Sipix Technology Inc (達意科技) for less than NT$1.5 billion (US$50 million) to expand the company’s product lineup.
The announcement came two months after local power-supply manufacturer Delta Electronics Inc (台達電子) said it would withdraw from the e-paper display market after its technology partner, Bridgestone Corp, decided to exit the market because of growing competition and rapid price declines.
The exit “does not mean business opportunities in the [e-paper display] market is shrinking,” E Ink vice chairman Felix Ho (何奕達) told a media briefing yesterday.
E Ink, which supplies Amazon and Sony e-readers, said it had reached agreements with Sipix’s major shareholders to buy an 82.7 percent stake and that it expected to complete talks with other shareholders and fully acquire the company by next quarter.
“We believe the acquisition of Sipix will allow us to provide more options in terms of product types and technologies,” E-Ink chairman Scott Liu (劉思誠) said. “The acquisition will also help boost E Ink’s revenue and profits.”
The deal would also help the company expand its patent coverage and talent pool, Liu said.
Sipix is the e-paper display arm of the nation’s No. 2 LCD panel manufacturer, AU Optronics Corp (友達光電), which plans to sell 40.6 million shares, or 38 percent, of Sipix to E Ink for NT$538 million, or NT$13.284 per share, through two of its investment firms, according to a company filing to the Taiwan Stock Exchange.
AU Optronics said it would earn NT$300 million from the share sales, as the unprofitable panel maker follows Delta’s step in exiting the e-paper display business.
Sipix supplies e-paper displays mostly for e-tags, smart cards and special displays for consumer electronics, E Ink said. The company, which has 350 workers, makes 400,000 6-inch glass substrates a month in Taoyuan.
Shares of E Ink rallied 5.45 percent to NT$32.90 yesterday, while the stock price of AU Optronics plunged 6.9 percent to a record low of NT$8.37.