Shares of E Ink Holdings Inc (元太科技) yesterday surged 3.86 percent after the world’s sole e-paper display maker said that some of its customers are willing to pay deposits to secure supply.
E Ink shares yesterday closed at NT$148. Since the beginning of this year, the price has more than tripled from NT$48.5.
The Hsinchu-based company said it is racing to expand capacity, but is still unable to catch up with demand.
Photo courtesy of E Ink Holdings Inc
The company has budgeted NT$2 billion (US$72.1 million) for capital expenditure this year and plans to expand its capital investment to between NT$3 billion and NT$4 billion next year.
“Demand is quite strong, while supply is currently tight,” E Ink chairman Johnson Lee (李政昊) said on Thursday. “It is a challenge to fully satisfy demand. Our capacity has been fully booked for the whole year of next year.”
However, E Ink is cautious about the fallout of the US Federal Reserve’s plan to increase its benchmark interest rates next year and mounting inflation concerns, as those factors could dampen private consumption and undermine demand for electronic products, Lee said.
E Ink plans to build four new production lines, with the first to begin operations by the end of this year, and two more to start production next year.
That would more than double the company’s capacity from the start of this year.
The fourth line is expected to begin production in 2023, the company said.
E Ink attributed the growth momentum to replacement demand for color e-readers and emerging demand for e-notes, which are designed to replace paper notebooks and printed documents as the company’s next-generation color display technology, Kaleido plus, gains traction.
E Ink has added Norwegian e-note vendor reMarkable AS to its client list.
Demand for store shelf labels also soared as more US hypermarket operators and retailers such as Best Buy Co Inc, Walmart Inc and The Home Depot Inc joined their European peers in replacing paper labels with electronic ones.
The COVID-19 pandemic helped boost demand for e-paper displays used as shelf labels as major retailers looked to benefit from the operational efficiency they provide especially when labor became scarce due to pandemic-related restrictions, E Ink president F.Y. Gan (甘豐源) said.
It takes only three hours for hypermarkets with 2,000 outlets to adjust their prices using the labels, compared with two weeks previously, Gan said.
By the end of this year, E Ink expects the number of e-paper displays used in shelf labels to reach 400 million since they first hit the market in 2012, Gan said.
About 60 percent of the shipments would be to the European market, he said.
To better service its customers in Europe, E Ink is planning to establish a new team in the Netherlands probably in 2023 and could expand the unit into a branch office in the longer term, he said.
That would complete E Ink’s global deployment, since it would operate either a branch office or manufacturing facility in Taiwan, China, the US and Europe, he added.
The new European team would be also be helpful in addressing the carbon border tax on imports from non-EU manufacturers, which is expected to take effect in 2026, the company said.
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