E Ink Holdings Inc (元太科技), the world’s No. 1 e-paper display maker, yesterday said operating income spiked 76 percent last quarter, thanks to strong demand for e-readers such as the Kindle from online bookstore operator Amazon.
Operating income surged to NT$1.13 billion (US$35.5 million) in the second quarter, compared with NT$644 million in the first quarter, after gross margin rose to set an all-time high of 39.6 percent. Gross margin stood at 29.7 percent in the first three months of the year.
Rising shipments of better-price e-paper displays and high-end flat panels used in Apple Inc’s iPad tablet device were major factors behind its strong growth in operating income, E Ink Holdings said. The firm did not disclose shipment figures.
Net income, however, fell slightly by 0.6 percent at a quarterly rate to NT$700 million during the period from April to June from the first quarter’s NT$704 million, which included a one-off of NT$300 million in royalties charges, primarily from South Korean LCD panel maker LG Display Co.
A year ago, E Ink lost NT$955 million.
“We are very satisfied with the growth of e-reader sales ... Amazon’s new Kindle is outfitted with our new-generation Pearl e-paper display and supply could become tight as pre-sales are excellent,” company chairman Scott Liu (劉思誠) told investors.
That, to some extent, countered concerns about iPad’s erosion of consumer support for e-readers, said Liu, adding that the Kindle and the iPad were two distinct devices in terms of features and targeted users.
E Ink commands more than 90 percent of the e-paper display market around the world.
Good uptake of e-readers and a rising share in high-margin products, such as high-end LCD panels made on key technology from its South Korean unit Hydis Technology Co, have helped push the higher gross margin, Liu said.
Hydis had swung into profit in April after switching its products to e-paper displays and high-end LCD panels, he said.
Looking ahead, Liu said revenues would pick up this month, leading to growth of between 40 percent and 50 percent in the second half of the year, compared with NT$10.18 billion made in the first half, on the back of the US holiday shopping season.
Sixty-five percent of the company’s revenue came from e-paper displays and it has not seen substantial progress by rivals.
Liu said his company was ready with colored e-paper displays and he expected China’s e-reader maker Hanvon Technology Co (漢王科技) to become the first company using the displays.
Sales of global e-readers are expected to double to 20 million units next year as retail price has fallen to less than US$200 plus contract service, Liu said.
Shares of E Ink plunged 2.92 percent to NT$46.6, under-performing the benchmark TAIEX, which slid 0.72 percent yesterday.
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
RSS