E Ink Holdings Inc (元太科技) yesterday announced capacity expansion projects in Taiwan and China, as the world’s biggest e-paper display supplier aims to boost production of e-paper materials and flexible films.
The company plans to invest NT$3.31 billion (US$110.4 million) in Taoyuan’s Guanyin District (觀音) and 3.25 million yuan (US$479,400) at its Chinese facilities in Yangzhou, Jiangsu Province, it said.
The Hsinchu-based firm said its manufacturing capacity continues to be tight and it is unable to fully satisfy customer demand.
Photo: Chen Mei-ying, Taipei Times
Through 2024, the company plans to spend between NT$5 billion and NT$6 billion each year to fund those projects, it said.
“We are relatively positive about our business outlook,” E Ink chairman Johnson Lee (李政昊) told an online investors’ conference. “With more capacity coming online, we expect the third quarter would be better than the second quarter. The fourth quarter would also be better than the third.”
The anticipated sequential growth in revenue and net profit in the second half of the year comes as the world’s major retailers quicken pace in installing electronic shelf labels (ESLs), offsetting weakening demand for e-reader and e-note products, E Ink said.
Although consumers have turned cautious about spending on consumer electronics, including e-readers and e-notes, in the second half of the year, ESL demand remains strong, Lee said.
The shipments of e-reader modules could be 10 percent lower than E Ink’s estimates for this year, but they would still grow over last year, the company said.
More retailers are adopting ESLs rather than paper price tags to adjust prices automatically, Lee said, adding that ESL replacement demand remained strong.
“The ESL market is entering an organic growth phase. We believe it is still in an early stage of growth,” he said.
E Ink expects the penetration rate of ESLs to surpass 10 percent this year, compared with about 5 percent in the past few years.
The market could reach 30 billion or 40 billion units based on some customers’ calculations, he said.
E Ink posted a record-high net profit of NT$2.37 billion for last quarter, surging 71 percent from NT$1.39 billion a year earlier.
The company said it has seen a significant annual growth in e-reader shipments in the first half of this year.
The company’s first-half net profit expanded 50 percent year-on-year to NT$3.84 billion from NT$2.56 billion, while earnings per share rose to NT$3.36 from NT$2.26 a year earlier.
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