E Ink Holdings Inc (元太科技), which supplies e-paper displays for amazon.com’s and Rakuten Kobo Inc’s e-reader series, yesterday reported its first operating profit in five years as a major product revamp started bearing fruit.
During the five-year span, E Ink had been reliant on royalty fees to make a profit as it took a beating from falling panel prices amid an industrywide overcapacity.
Last year, the company booked NT$2.25 billion (US$74.29 million) in royalty income, which helped lift its bottom line to NT$1.91 billion, more than tripling from NT$539 million in 2015.
Earnings per share surged to NT$1.69 last year from NT$0.47.
Operating income stood at NT$61 million last year, compared with an operating loss of NT$449 million in 2015, the company’s financial statement showed.
“That was mainly due to an improved product mix and enhanced productivity, as well as the company’s asset light policy and divestment [from unprofitable businesses],” E Ink chairman Frank Ko (柯富仁) told his first investors’ conference since assuming the post in 2014.
E Ink, a pioneer among local LCD panel makers, quit the market in the final quarter of last year and focused on becoming a dedicated e-paper display supplier after shuttering its South Korean LCD manufacturing subsidiary Hydis Technology Inc early last year.
Gross margin climbed to 36.56 percent last year, compared with 31.18 percent in 2015 and 22.59 percent in 2014, thanks to greater contributions from higher-margin e-paper displays mostly for e-readers.
The figure is likely to climb further this year, aided by falling manufacturing costs and an improved product portfolio, Ko said.
Ko is also optimistic about revenue growth this year, saying that new sales drivers, such as e-paper display applications, electronic shelf labels and electronic signages, should make up for the loss of the LCD panel business.
LCD panels accounted for about 10 percent of E Ink’s total revenue of NT$14.01 billion last year.
Electronic shelf labels accounted for 17 percent, the firm said.
Ko has already seen growth momentum for the company’s e-paper displays accelerate in the first half of the year.
“Demand for e-readers remained robust in the first half, bolstered by orders from our major clients. We expect annual growth from this segment,” Ko said.
An improving global macroeconomy has helped drive demand from Asia, China primarily, and emerging markets, such as India, Ko said.
Shipments of electronic shelf labels are forecast to expand by at least 20 percent year-on-year in the first half, Ko said.
Asian and US retailers are joining their European peers in substituting paper shelf labels with electronic labels, as they can recover their costs in less than two years, Ko said.
“Electronic shelf labels is a very promising business,” Ko said.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
ELECTRIC FARMLAND: TSMC’s proposal to clear 230 hectares of reforested land for what would become Taiwan’s largest photovoltaic solar farm has generated concerns New rules curbing solar farms built on agricultural land sparked fierce debate at a packed public hearing at the Legislative Yuan yesterday, with industry representatives saying that the new restrictions would endanger President Tsai Ing-wen’s (蔡英文) green energy goals, while agricultural officials emphasized the importance of protecting farmers and the environment. The Tsai administration has set a target to generate 20 percent of the nation’s power from renewable sources by 2025, by which time it also aims to install 20 gigawatts (GW) of solar power, including 6GW from rooftop solar systems and 14GW from ground-mounted solar farms. Although rooftop solar systems are
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees