E Ink Holdings Inc (元太科技), the world’s biggest e-paper display supplier, yesterday lowered its revenue forecast for this year, expecting sales to remain flat or dip by a single-digit percentage from last year as customers prepare for adoption of next-generation color e-paper display technologies.
The Hsinchu-based company said that it expects the decline to be short-lived and revenue to return to growth next year once the technological transitions are completed.
“We usually see new growth momentum after customers adopt new technologies entirely,” E Ink chairman Johnson Lee (李政昊) told an online investors’ conference.
.Photo: Chen Mei-ying, Taipei Times
“Overall, we think 2024 will be a better year than 2023,” Lee added.
The company in May projected that revenue would expand by a single-digit percentage year-on-year this year, pinning its hopes on the uptake of electronic shelf labels to offset weak e-reader demand.
“Looking at this year, we have made some adjustments compared with what we said during the last investors’ conference,” Lee said. “It looks like revenue this year would be flat, or even drop by a single-digit” percentage.
Gross margin for the year would be about 51 percent, unchanged from its previous projection for an improvement from 47.58 percent a year earlier, he said.
Retailers are conservative about ordering older-generation three-color e-paper displays for shelf labels, as they are prepared to adopt new-generation four-color technology, which is more price competitive, Lee said.
However, four-color display supply has been restricted by development delays of new driver ICs, he added.
E Ink said that it expects the issue of driver IC supply to be resolved in the fourth quarter.
The company said it has weathered technology transitions in its e-reader business.
Some customers are revamping their e-reader product lines by substituting monochromatic displays with new color displays to stimulate demand, E Ink said.
Business growth is also impeded by a capacity shortage for its Kaleido technology, a more cost-effective color e-paper display technology, it said.
E Ink is struggling to fully satisfy demand, with its production lines fully utilized, it said, adding that it would be unable to fully satisfy customer demand through next year.
The company said that it has made progress in broadening its product portfolio to large e-paper displays for outdoor and indoor digital signage after capacity expansion was approved by its board of directors.
It said it expects a new line in China to start production of 75-inch, 85-inch and 95-inch e-paper displays in the second or third quarter next year.
The new displays would make a significant contribution of revenue from 2025, the company said.
E Ink yesterday said that net profit rose 2 percent annually to NT$2.42 billion (US$75.87 million) last quarter from NT$2.37 billion in the same period last year.
On a quarterly basis, net profit soared about 37 percent from NT$1.77 billion, it said.
Earnings per share rose to NT$2.12 from NT$2.08 a year earlier and NT$1.54 a quarter earlier, it said.
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