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E Ink Holdings EPD prospects are good

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Core information:

See also:
Hydis
E Ink Holdings (8069.TWO) Initiate at Buy: Dual Growth Engines to Propel Earnings [comprehensive  32 pages evaluation by Citi Investment Research & Analysis, a
division of Citigroup Global Markets Inc., Aug 4, 2011] HIGHLY RECOMMENDED READ and NOT ONLY FROM PURE SHARES AND FINANACIALS POINT OF VIEW

Updates:
EIH posts sharp revenue declines in December [Jan 9, 2012]

E Ink Holdings (EIH) has announced consolidated revenues of NT$1.59 billion (US$52.57 million) for December, 2011, a sharp decline of 55% sequentially and 57% on year. For all of 2011, revenues totaled NT$38.43 billion [US$1.27B], increasing 53% from a year earlier, according to a company filing with the Taiwan Stock Exchange.

Affected by seasonal factors, EIH is expected to see its revenue continue to drop by a double-digit rate in the first quarter of 2012, the Chinese-language Commercial Times quoted industry watchers as indicating.

EIH looks to reach its shipment goal for 2011 [Dec 23, 2011]

Despite a decline in revenues in November, E Ink Holdings (EIH) will still be able to reach its goal of shipping 25-30 million EPD (electrophoretic display) products in 2011 with a gross margin of 30%, according to the company.

EIH posted revenues of NT$3.57 billion (US$117.88 million) for November, up 9% on year but sown 33% on month.

While shipments of FFS (fringe field switching) panels have started generating revenues for the company, high-margin EPD products still account for the majority of EIH’s total sales, allowing the company to maintain a gross margin of over 30%, indicated industry sources.

E-book reader sales are tripling every year [Aug 17, 2011]

Display Search,  a market research firm that is putting on the onference, estimates that e-book display emand could hit around 27 million units this year. That’s about three times the number sold in 2010. It shows that e-book reader sales are holding on to a slice of the portable market, despite
challenges from Apple’s iPad tablet computer.

This technology has already merged and it is in the mass market,” [chief marketing officer Sriram] Peruvemba said.

The competition between e-book readers and Apple’s tablet is a familiar one. It’s like using a specific-purpose device, or using something like a Swiss Army knife. So far, the e-book reader has survived because it has done a better job of providing an electronic reading experience to consumers.

Due to the popularity of the Kindle, e-book reader sales have tripled every year since 2006. That’s a lot of progress for a new kind of display, dubbed an ePaper display, that debuted with the sale of about 100,000 units in 2006. Last year, E Ink Holdings generated $650 million in sales, and this year it expects to surpass $1 billion in revenue, Peruvemba … said.

In its history, E Ink raised $150 million and it will exceed $1 billion in revenue. By comparison, makers of organic light emitting displays have spent perhaps $30 billion and have yet to make a return on that investment. That’s the nature of the display business. E Ink estimates it is the most profitable company in displays. It helps to have a novel idea.

A 6″ E Ink Pearl panel running on the Freescale i.MX50 EVK, showing the quick refresh rate possible with such a setup:

E Ink Holdings hikes 2011 EPD shipments to 25-30 million units [July 29, 2011]
E INK HOLDINGS AND CPT COOPERATE TO EXPAND EREADER AND TABLET MARKETS [July 19, 2011]

Chunghwa Picture Tubes, Ltd. (TAIEX: 2475; “CPT”) and E Ink Holdings Inc. (TAIEX: 8069; “E Ink”) jointly announced today that each of their board of directors had passed a resolution, enabling E Ink to make an investment into CPT with a view to strengthen their collaboration in technology and in production capacity. Through this investment and cooperation, both companies expect to further expand electronic paper and FFS (Fringe Field Switching) panel business. The strategic alliance will further solidify their existing leadership position in eReader, tablets and other mobile devices markets.

The investment will be a total of NT$1.5 billion [US$ 52M] in the form of unsecured convertible bonds issued through private placement in Taiwan. The conversion price will be at NT$3.25 per share. This issue, expected to be completed by the end of July this year, is for a period of 3 years.

This investment enables the expansion of panel production capacity and exchange of related technological information between the two companies. This investment is also aimed at improving the utilization of CPT’s production lines and enabling them to focus on higher-end value-added products.

“This cooperation will strengthen E Ink’s capacity to meet the demand of the fast-growing eReader market while CPT can better utilize their 6th-gen fab,” says E Ink’s Chairman Scott Liu. “More importantly this strategic alliance will expand the relevant markets for both companies”.

The co-operation is expected to result in an integrated supply chain. CPT will also manufacture FFS LCD displays, thereby expanding Hydis’ FFS manufacturing capacity. FFS technology based LCD are the market share leaders in displays for tablets and other mobile devices, just as E Ink’s dual pigment ePaper technology is the market share leader for eReader displays. E Ink’s investment will secure a steady supply of display panels for both its EPD and FFS business.

Hanvon first to adopt E Ink-developed color e-paper display [June 15, 2011] (emphasis is mine)

Hanvon Technology, the largest China-based vendor of e-book readers, is the first client adopting a color e-paper display developed by Taiwan-based E Ink Holdings (EIH) and will launch 9.68-inch color e-book readers in the China market in July, according to EIH chairman Scott Liu.

Booming sales of tablet PCs have not impacted global demand for e-book readers, with both market segments growing fast, Liu said, adding global shipments of e-paper display products in 2011 will double or even triple those of 2010.

The average production cost of e-paper displays will drop by 15-20% every year in the near future, approximately offsetting annual decrease of 15-20% in average selling price (ASP) of e-book readers, Liu noted.

Touch e-book readers tend to become a trend, with touchscreens mainly based on infrared and electromagnetic technologies.

End of Updates

EIH sees EPS more than double on year in 1Q11 [April 28, 2011] (emphasis is mine)

Electrophoretic display (EPD) maker E Ink Holdings (EIH) has reported net profits of NT$1.67 billion (US$57.71 million) on revenues of NT$10.09 billion for the first quarter of 2011. The earnings translated into an EPS of NT$1.56 for the quarter, which were more than double the NT$0.70 a year earlier but down from NT$1.80 recorded in the previous quarter.

Shipments of EPD products will stay flat in the second quarter due to conservative buying from the LCD segment, and therefore second-quarter revenues will be down slightly from the levels recorded in the first, according to company chairman Scott Lin.

Sales of EPD products contributed 60-70% to EIH’s total revenues in the first quarter and LCD products made up the remaining 30%, the company noted.

With demand for e-book readers expected to continue growing, the global market for EPD products is likely to expand 2-3 fold on year in 2011, EIH estimated.

Amazon’s recent move to cut the price of Kindle e-book readers from US$139 to US$114 in the US market will help drive up EIH’s shipments of e-paper, EIH asserted.

Global sales of EPD products increased 300% in 2010 after the launch of iPad, and so the launch of iPad 2 will have a limited impact on the e-paper industry, EIH commented.

See also the latest update:  E Ink and Epson achieve world-leading ePaper resolution [May 23, 2011]

Digitimes Insight: 2011 global e-book reader shipments to reach 27 million units [April 28, 2011]

Demand for e-book readers remained strong in first-quarter 2011, with global shipments soaring 236% on year to 4.8 million units. Digitimes Research believes global e-book reader shipments will reach 27 million units in 2011.

Among the brand-name vendors, Amazon will continue to be the market leader with an 60% share of global shipments in 2011. Barnes & Noble may hold on to second place, but its gap with third-place Sony will narrow.

North America will remain the biggest market for e-book readers, accounting for 72% of global shipments, but growth in the area is slowing down. E-book reader vendors are now aggresively expanding their presence in the Europe market, which is registering higher-than-average growths.

Monotone e-book readers will remain the mainstream in the next three years, during which no breakthrough in developing color devices can be expected. Global e-book reader shipments will reach 63 million units by 2014.

Source: Digitimes Research, April 2011

E Ink posts strong revenue gains in 1Q11 [April 8, 2011]

Electrophoretic display (EPD) maker E Ink Holdings (EIH) has posted consolidated revenues of NT$3.36 billion (US$115.94 million) for March, up 18.3% sequentially and 79.6% on year.

For the first quarter of 2011, revenues reached NT$10.09 billion, increasing 101.2% from a year earlier. Both the monthly and quarterly figures were the company’s highest records.

Strong marketing for the Kindle e-book readers by Amazon in Europe helped boost EIH’s shipments of EPD products in March, according to a Chinese-language Commercial Times report.

E Ink to add investment in China subsidiary [March 31]

Electrophoretic display (EPD) maker E Ink Holdings (EIH) has decided to add investment of US$8.0 million in its China-based subsidiary, Transcend Optronics (Yangzhou), which makes tablet PC-use LCD modules (LCMs).

EIH also has plans to take out a 5-year syndicated bank loan of NT$5 billion (US$170 million) for its own, and another US$100 million for its four subsidiaries, E Ink Corporation, Tech Smart Logistics, Transcend Optronics (Yangzhou) and Rich Optronics (Yangzhou).

EIH’s board also decided to buy back 11 million shares of its stock, equivalent to a 1.02% stake, at NT$35-55 per share from March 31-May 30, with the stock to be transferred to employees.

EIH enters EPD-based signage segment [March 16, 2011]

Electrophoretic display (EPD) maker E Ink Holdings (EIH) has ventured into advertising signage in the US, Korea, Taiwan and other markets, leveraging its Ink-In-Motion technology, according to the company.

The EPD signage business will be developed by its Surf business unit, said the company, noting that the business unit has teamed up with Neolux to promote the new business in Korea, and has also cooperated Sinopac bank to launch signage boards in Taiwan.

Supply of e-paper products remains smooth, says EIH [March 15, 2011] (emphasis is mine)

Electrophoretic display (EPD) maker E Ink Holdings (EIH) has stated that its production and shipments of EPD products have remained steady as only a small portion of components is coming Japan.

EIH purchases TFT backboards used in EPD production from Taiwan-based Chimei Innolux (CMI) and Chunghwa Picture Tubes (CPT), explained the company, noting that shipments of FFS panels from its Korea subsidiary Hydis have not been disrupted.

The company expects its March revenues to bounce back to its historical high of NT$3.88 billion (US$131.66 million) recorded in January after the revenues dropped to NT$2.84 billion in February.

E Ink to triple EPD capacity in 2011 [Feb 16, 2011] (emphasis is mine)

Amid increasing demand for e-paper, as well as FFS panels for tablet PCs and smartphones, electrophoretic display (EPD) maker E Ink Holdings (EIH) plans to expand its EPD capacity by 2-3 times in 2011, and will also expand its FFS panel capacity, as well as its component suppliers and OEM proportion, according to company president YS Fu.

Market sources expect EIH’s revenues for 2010 to reach NT$25.18 billion (US$856.47 million), on a net profit of NT$4.03 billion for the year. With expanding market demand and capacity, EIH’s revenues may double to NT$40-50 billion in 2011, the sources added.

In terms of EPDs, Fu indicated that the e-book reader market will continue to increase as research firm data showed that 40% of current iPad owners also own an e-book reader, and 23% of the iPad users showed willingness to purchase an e-book reader in the next year. The data also indicated that e-book readers and tablet PCs are individual products with no conflict in the market, Fu added, saying that the paper like characteristics of EPD is the major reason the e-book reader market will continue to grow.

Fu noted that e-book readers currently still focus on the commercial market and it will take time to develop the education market. With increasing content and dropping prices, the global e-book reader market is expected to reach 10 million units in 2010 and increase to 20-30 million units in 2011, of which the US market will generate the largest demand, while Europe will rapidly increase.

The tablet PC market is gaining attention, and the global market is expected to exceed 50 million units in 2011. Along with surging demand from the smartphone market, EIH’s shipments for FFS panels are expected to increase significantly, and the company plans to expand its capacity as well as looking for new OEM partners in China, in addition to its existing OEM partners Chimei Innolux (CMI) and Chunghwa Picture Tubes (CPT)

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1 Comment

  1. […] that it is also worth to go through the previous posts: E Ink Holdings EPD prospects are good [April 30, 2011 – Jan 9, 2012], Barnes & Noble NOOK offensive [May 25, 2011], E Ink and Epson […]

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