E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays, yesterday said it was optimistic about revenue growth this year, but tight supplies of display driver ICs and flat-panel displays might cap its sales.
“For the whole of this year, we are positive about the business outlook. However, it will largely hinge on how much key components we can secure,” E Ink chairman Johnson Lee (李政昊) told investors via a teleconference in Taipei.
“So far, it looks like this year will be better than last year,” Lee said. “The second quarter [performance] will be very similar to the first quarter.”
Photo: Chen Mei-ying, Taipei Times
Customer demand is not an issue for E Ink, as demand has greatly exceeded what the company can supply. E-paper is used in e-readers, e-notes and retailers’ electronic shelf labels, replacing traditional paper.
“Many clients have started talks with us about next year’s capacity arrangements as most deals for this year have been settled,” Lee said.
To catch up with customers’ rising demand, E Ink said it plans to add four new production lines to expand capacity, mainly for electronic shelf labels, as well as invest in a new office building that would also include a production line.
The new office building would cost NT$1.91 billion (US$68.26 million), the company said.
The company expects capacity to grow multiple-fold after the new expansion plan is completed next year at the earliest.
The company raised its capital spending for this year to about NT$2 billion from the NT$1.5 billion it estimated in March.
E Ink’s net income soared 48 percent to NT$1.17 billion during the quarter ending March 31, compared with NT$787.26 million a year earlier.
Earnings per share increased to NT$1.03 from NT$0.69 in the same period last year, making last quarter the best first quarter in about eight years.
Gross margin climbed to 49.78 percent, compared with 46.23 percent in the first quarter last year.
E Ink expects its gross margin to trend down in the following quarters, eroded by price increases in key components.
“Our strategy is not to pass on the rising costs to customers, as the e-paper market is still in the nascent stage of expansion. Besides, we are the single source. We should not do this,” Lee said.
To boost e-paper’s penetration of the education market, E Ink has formed an e-paper industry alliance in Shanghai to promote e-readers and e-notes for students.
The company expects the alliance’s membership to double to 200 companies next year.
MediaTek Inc (聯發科), Inventec Co (英業達) and Innolux Corp (群創), as well as China’s Xiaomi Corp (小米), Lenovo Group Ltd (聯想) and Hisense Electric Co (海信), plan to join the alliance, E Ink said.
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