E Ink Holdings Inc (元太科技), the world’s biggest e-paper display supplier, is bracing for a headwind in the first half of this year due to dwindling demand and excessive stockpiles, it said yesterday.
E-paper displays for e-readers and new e-notebooks constituted 70 percent of E Ink’s overall revenue last year, totaling NT$15.2 billion (US$521.58 million).
“We expect the e-reader segment to weaken amid a slack season. Moreover, clients are transitioning to new models, which is digesting inventories,” company chairman Frank Ko (柯富仁) told an investor teleconference. “We are conservative about the outlook for shipment figures of e-paper displays for e-readers.”
Ko forecast that e-notebooks and electronic shelf labels would be the bright spots, with e-paper displays for those two categories showing annual growth in the first two quarters of this year as customers launch more products to take advantage of an uptake of those applications.
E-paper displays used in electronic shelf labels made up about 17 percent of the company’s total revenue last year, E Ink said.
Chinese retailers — such as a new supermarket funded by Alibaba Group Holding Ltd (阿里巴巴) — last year joined their peers in the US and Europe in adopting electronic shelf labels, the company said.
E-paper displays for e-notebooks are to grow substantially this year given last year’s lower comparison base, it said, adding that the company began supplying e-paper displays for clients in the third quarter of last year and expects to increase shipments this year.
To cope with growing customer demand, E Ink said it plans to increase its capital spending this year, compared with NT$440 million last year.
Royalty income is to remain stable at an average of NT$2.4 billion this year, from NT$2.6 billion last year, it said.
Gross margin is to hold steady or drop slightly in the first six months of this year, compared with 39.5 percent for the same period last year, Ko said, adding that the decline could be attributed the a strong New Taiwan dollar, higher raw material costs and unfavorable product portfolios.
E Ink registered 42.1 percent gross margin for the final quarter of last year, bringing it to 42.88 percent in the second half of last year.
The company posted a loss of NT$50 million in the fourth quarter of last year, from a profit of NT$1.17 billion in the previous quarter and a profit of NT$891 million for the previous year.
E Ink said a foreign-exchange loss of NT$461 million and a loss of NT$516 million from bankrupted Hydis Technologies Co were behind the weak earnings.
E Ink no longer needs to book any losses from the South Korean subsidiary as it has settled lawsuits with the labor union at Hydis and has disposed of all the firm’s equipment and facilities, it said.
For the whole of last year, E Ink saw net profit increase 8.9 percent to NT$2.08 billion, from NT$1.91 billion the previous year. Earnings per share rose from NT$1.69 to NT$1.85 and foreign-exchange losses swelled to NT$671 million.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in