E Ink Holdings Inc (元太科技), the world’s biggest e-paper display supplier, yesterday revised downward its revenue growth forecast for this year to between 10 and 15 percent, from the 20 to 25 percent it previously estimated, as surging memory prices are hurting demand for its e-readers and e-notes.
The company had expected a transition from monochrome color e-paper displays to color displays used in e-readers and e-notes to continue this year.
However, rapidly increasing memory prices have caused customers to postpone new product launches, while demand for models from previous generations has also dwindled due to higher prices, E Ink said.
Photo: Chen Mei-ying, Taipei Times
That created “headwinds mainly for consumer products such as e-readers and e-notes,” E Ink chairman Johnson Lee (李正昊) told an earnings conference in Taipei. “We are seeing a double-digit revenue decline” in that segment.
Still, Lee has retained his forecast of “healthy growth” for the company’s Internet-of-Things business, mainly e-paper used in electronic shelf labels (ESL).
The IoT revenue would grow 20 to 25 percent annually this year, thanks to accelerating adoption of ESLs by large-scale US and European retailers, he said.
E Ink’s capital expenditure would remain at NT$8 billion (US$248.69 million) this year, as the company is building new production lines for large e-paper displays to optimize the unit cost of its digital signage products, he added.
Demand for 8-inch to 15-inch digital signage is robust, while demand for 32-inch digital signage fell short of company expectations due to affordability issues.
Digital signage e-paper displays are projected to grow at a high-single-digit percentage this year, it said.
This quarter, revenue would slide moderately from NT$10.22 billion in the second quarter due to sagging demand for e-paper displays used in e-readers and e-notes, Lee said.
“The third quarter used to be a peak season for E Ink. The pattern will be different this year,” he said. “The fourth quarter will be the peak season this year.”
E Ink’s net profit last quarter expanded 26 percent year-on-year to NT$3.73 billion from NT$2.97 billion. Earnings per share (EPS) rose to NT$3.23 from NT$2.58, while gross margin edged lower to 58.7 percent from 60 percent a year earlier.
In the first half of the year, net profit advanced 26 percent to NT$6.52 billion from NT$5.17 billion in the same period last year. EPS climbed to NT$5.65 from NT$4.5.
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