E Ink Holdings Co (元太科技), which holds a dominant position in the world’s electronic paper display market, yesterday posted its first operating loss in about eight quarters as e-reader sales slowed due to product transition and operating expenses rose.
The results were largely in line with the company’s expectations, as e-reader clients revamp their models and shift to screen sizes larger than 6 inches.
However, E Ink expects growth momentum to pick up later this quarter from last quarter’s NT$2.99 billion (US$99.69 million), bringing it back on track with its full-year revenue forecast.
Nearly 70 percent of the company’s total revenue last year came from e-paper displays used in e-readers.
“Revenue in the second quarter will be better than the first quarter,” said Patrick Chang (張元培), a financial director at E Ink. “We still believe that revenue for the full year will grow from last year’s level.”
E Ink posted an operating loss of NT$263.89 million for the quarter ending March 31, compared with an operating profit of NT$45 million in the same period last year, according to the company’s financial statement.
Operating expenses climbed 14.3 percent year-on-year to NT$1.37 billion last quarter from NT$1.2 billion.
They included a 26 million euro (US$30.54 million) equity investment in SES-imagotag as E Ink aims to accelerate electronic shelf label (ESL) growth.
“We are seeing high-speed growth in the ESL market as South America is joining Europe, China and the US adopting the solution,” E Ink president Johnson Lee (李政昊) told an investor teleconference yesterday.
“We cannot satisfy the strong growth just with our own module capacities. We want to create an ecosystem to address that growth together with our partners,” Lee said.
SES-imagotag is the world’s No. 1 player in the e-tag market, Lee said.
The investment should help E Ink develop electronic shelf labels that better cater to market demand, he added.
Aside from e-readers and ESL, eNote is gradually becoming its third revenue driver, he said.
E Ink’s flexible e-paper displays are used in electronic notebooks for students, hospitals and government agencies.
The company is expanding its reach to equip flexible e-paper displays for new areas such as car license plates.
Last quarter, E Ink eked out a net profit of NT$49 million, aided by an 8.52 percent annual increase in royalty income to NT$446 million and less the financial burden from its bankrupt South Korean subsidiary Hydis Technologies Co.
Last quarter’s figure represented a decline of 64.2 percent from a net profit of NT$137 million the previous year.
On a quarterly basis, net profit sank 89.2 percent from NT$456 million.
Gross margin fell to 38.3 percent last quarter, compared with 38.7 percent a year earlier and 42.1 percent a quarter earlier.
E Ink attributed the contraction to higher shipments of lower-margin flexible e-paper displays and increased key components costs, such as multilayer ceramic capacitors.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS