E Ink Holdings Inc (元太科技), which supplies e-paper displays for Amazon.com Inc’s Kindle series, swung into a loss in the first quarter as royalty income shrank drastically, the company reported yesterday.
The net loss was NT$272 million (US$8.34 million) during the quarter ending March 31, compared with a net profit of NT$766 million in the final quarter last year, as non-operating income nosedived to NT$328 million from NT$1.32 billion over the period, the company said.
However, first-quarter losses narrowed from NT$1.23 billion in losses a year ago, as losses stemming from its unprofitable South Korean subsidiary Hydis Technologies Co improved noticeably to NT$26 million from NT$962 million following plant closures in March last year.
Operating losses swelled to NT$495 million last quarter, compared with NT$188 million a quarter ago and NT$478 million a year earlier.
E Ink has been making operating losses over the past two years, except reporting an operating profit of NT$354 million in the third quarter last year.
Gross margin was 29 percent in the first quarter, down 7 percentage points from the previous quarter due to smaller scale of operation, but much higher than 23 percent a year earlier.
E Ink financial executive Lloyd Chen (陳樂群) told a teleconference yesterday that revenue for this quarter would grow to a level similar to the NT$3.48 billion made in the second quarter last year.
That will represent a growth of 39 percent from first-quarter revenue of NT$2.5 billion.
E-paper displays for e-readers accounts for 70 percent of E Ink’s total revenue, with about 30 percent from e-papers for e-tags used in luggages and retailers’ shelves and LCD panels, the company said.
Commenting on this year’s royalty income outlook, Chen said that the number will fall by between 5 percent and 10 percent from last year’s NT$3 billion, affected by the industry’s rising adoption of organic LED (OLED) display technology.
However, “the impact will not be significant over the next two to three years because the manufacturing costs on OLED technology are still higher,” Chen said.
E Ink charges royalty fees by licensing Hydis’ high-resolution fringe-field-switching (FFS) LCD technology, which was first adopted by Apple Inc in its iPhone 4 and iPad models.
Apple’s recent plans to adopt OLED technology for new iPhones have triggered concerns about demand for FFS technology and therefore E Ink’s royalty income.
E Ink shares rose 1.64 percent to NT$15.5 yesterday.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) secured a record 70.2 percent share of the global foundry business in the second quarter, up from 67.6 percent the previous quarter, and continued widening its lead over second-placed Samsung Electronics Co, TrendForce Corp (集邦科技) said on Monday. TSMC posted US$30.24 billion in sales in the April-to-June period, up 18.5 percent from the previous quarter, driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence chips, laptops and PCs, which boosted wafer shipments and average selling prices, TrendForce said in a report. Samsung’s sales also grew in the second quarter, up
LIMITED IMPACT: Investor confidence was likely sustained by its relatively small exposure to the Chinese market, as only less advanced chips are made in Nanjing Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) saw its stock price close steady yesterday in a sign that the loss of the validated end user (VEU) status for its Nanjing, China, fab should have a mild impact on the world’s biggest contract chipmaker financially and technologically. Media reports about the waiver loss sent TSMC down 1.29 percent during the early trading session yesterday, but the stock soon regained strength and ended at NT$1,160, unchanged from Tuesday. Investors’ confidence in TSMC was likely built on its relatively small exposure to the Chinese market, as Chinese customers contributed about 9 percent to TSMC’s revenue last
LOOPHOLES: The move is to end a break that was aiding foreign producers without any similar benefit for US manufacturers, the US Department of Commerce said US President Donald Trump’s administration would make it harder for Samsung Electronics Co and SK Hynix Inc to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market. The US Department of Commerce in a notice published on Friday said that it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time. The move would revise what is known
UNCERTAINTY: A final ruling against the president’s tariffs would upend his trade deals and force the government to content with billions of dollars in refunds The legal fight over US President Donald Trump’s global tariffs is deepening after a federal appeals court ruled the levies were issued illegally under an emergency law, extending the chaos in global trade. A 7-4 decision by a panel of judges on Friday was a major setback for Trump, even as it gives both sides something to boast about. The majority upheld a May ruling by the Court of International Trade that the tariffs were illegal. However, the judges left the levies intact while the case proceeds, as Trump had requested, and suggested that any injunction could potentially be narrowed to apply
RSS