The e-paper industry is undergoing a significant transformation as it shifts from monochrome to color displays, triggering a replacement cycle for end products and boosting performance across the supply chain. Companies in the electrophoretic display sector, such as E Ink Holdings (EIH) and Netronix, have reported substantial improvements in their second-quarter operations.
Meanwhile, Iris Optronics, a player in the cholesteric liquid crystal (CLC) camp, has launched an upgraded color display for outdoor advertising to capitalize on the color replacement trend and partnered with US-based Kent Display Inc (KDI).
EIH overcomes inventory issues
The impact of the color e-paper replacement cycle is becoming increasingly evident. After navigating inventory adjustments, EIH's consolidated revenue in the second quarter reached NT$7.656 billion (US$237 million), representing a 35.7% quarter-on-quarter increase and a 5.8% year-on-year increase. The company's gross margin stood at 47.6%, with an operating profit of approximately NT$1.578 billion and net profit attributable to the parent company of approximately NT$2.016 billion.
EIH's cumulative revenue for the first half of 2024 reached NT$13.299 billion, down 8.1% year-on-year. Its gross margin was approximately 47.5%, operating profit was approximately NT$2.411 billion, and net profit attributable to the parent company was approximately NT$33.4 billion. July's consolidated revenue, however, reached NT$3.014 billion, up 8.7% month-on-month and 29.5% year-on-year.
During a previous conference call, EIH projected that its performance would continue to strengthen in the second half of the year, with each quarter surpassing the last. The latest developments and outlook will be detailed in the company's earnings call scheduled for August 15.
EIH financial summary (NT$m) | |||||
Financial | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
Sales | 7,236.10 | 6,821.20 | 5,832.70 | 5,642.80 | 7,655.90 |
Operating income | 2,030.30 | 1,930.70 | 1,512.00 | 833.10 | 1,577.70 |
Profit | 2,420.80 | 2,400.00 | 1,238.50 | 1,324.30 | 2,016.40 |
Source: EIH, August 2024
Netronix sets record second-quarter results
Netronix Technology reported consolidated revenue of NT$1.98 billion in the second quarter, a nearly 50% increase from the first quarter. This growth was attributed to strong demand for its newly launched color e-readers, marking the company's best second quarter ever. Cumulative consolidated revenue for the first half of the year reached NT$3.32 billion.
In terms of profitability, cumulative profit for the first half of 2014 reached NT$417 million, with net profit attributable to the parent company of NT$317 million, representing a significant jump in overall profitability.
Netronix noted that 2024 is the first year for color e-readers. By combining with key customers and the supply chain, and utilizing EIH's latest Kaleido 3 technology, the company launched two new 6-inch and 7-inch color models in May, which drove significant growth in second-quarter revenue and profit. The company expects this revenue momentum to continue and grow quarter-on-quarter.
At COMPUTEX 2024, Netronix showcased its flagship new product, the AI e-paper digital signage, which introduced EIH's new-generation Spectra 6 panel and integrated AI technology on the software side, allowing the display to present different information and content based on the usage environment, weather, and user preferences.
In the third quarter, Netronix's consolidated revenue reached NT$660 million, an approximately 10% increase from June. Cumulative revenue for the first seven months of 2024 grew by 5% compared to the same period in 2023.
Netronix expects continued strong shipments of new color e-book reader products, coupled with the traditional peak season, to drive revenue to new historical highs.
Netronix financial summary (NT$m) | |||||
Financial | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
Sales | 1,645.70 | 1,815.30 | 1,602.20 | 1,341.50 | 1,983.40 |
Operating income | 104.80 | 254.20 | 264.10 | 103.30 | 245.90 |
Profit | 76.30 | 180.90 | 87.10 | 130.00 | 186.60 |
Source: Netronix, August 2024
Iris Optronics partners with CLC technology inventor
In the CLC camp, Iris Optronics, KDI, and Ebulent Technologies Corp. have signed a strategic agreement, establishing a joint venture in the US and pursuing in-depth collaboration on strategic objectives such as technology development, commercial partnerships, resource integration, and intellectual property strategy. By connecting CLC technology with various applications, they aim to expand their global product footprint and market presence through their combined strengths and resources.
Iris Optronics has also developed an upgraded version of its 27.6-inch outdoor full-color advertising display, doubling the contrast and increasing color saturation by nearly 50% compared to its previous model.
KDI, the inventor of CLC technology, has invested a lot of resources in developing liquid crystal materials, display drivers, electronic engineering, and various advanced technologies. In addition to having a sales network, it also operates the cholesteric liquid crystal writing board product "Boogie Board."
Iris Optronics Chairman Albert Liao stated that the strategic alliance and joint venture with KDI mark a significant step forward in their longstanding technical partnership. This collaboration will deepen ties between the two companies and expedite their global market expansion.
KDI co-founder William Doane commended Iris Optronics for advancing CLC technology and developing a varied product range. He expressed optimism about the partnership, anticipating mutual technological support, shared patent resources, and enhanced supply chain synergies to bolster the overall e-paper ecosystem.
