E Ink to increase production of FFS panels at Hydis

Taiwan-based electrophoretic display (EPD) maker E Ink Holdings will increase the production of FFS (fringe filed switching) panels at its Korea-based subsidiary Hydis to 75% of its total capacity from 50% amid surging demand for better display solutions from the mobile device market, according to the company chairman Scott Liu.

As in-house production of TFT backplanes at Hydis will decrease, E Ink is purchasing backplanes from Chimei Innolux (CMI), Liu noted, adding that CMI has started using its 5G plant to supply backplanes to E Ink in August. CMI's 5G capacity will be enough to fulfill I Ink's demand for backplanes, he said.

E Ink has recently launched two EPDs, one of them being a capacitive touch solution and the other an electromagnetic one, Liu said. The EPDs are currently being validated by clients, and the company expects products featuring the new panels will hit the market by the end of 2010 or at the beginning of 2011, he said.

As for color EPD, China-based vendor Hanvon has adopted its color EPD and is scheduled to launch e-book readers using the color EPD in the fourth quarter, Liu said. The e-book reader panel adopts E Ink's latest Pearl EPD with color filter (CF), and it will have better response time and reflection, Liu explained, adding that E Ink expects color e-book readers to account for 10% of the global e-book reader market in 2011.

E Ink has posted consolidated revenues of NT$5.169 billion (US$162.42 million) for the second quarter of 2010 with a gross margin of 39.6%. Operating profit was NT$1.134 billion, up 80% sequentially. EPS for the second quarter came to NT$0.65, and NT$1.35 for the first half of the year.

Revenues for the third quarter of 2010 are expected to increase with the coming of the peak season in September-November, Liu remarked. However, he said, gross margin is expected to drop slightly in the third quarter as its clients are dropping prices of their products. It is hard to estimate the drop, but E Ink expects gross margin may remain over 30%, he added.

E Ink has also posted consolidated revenues of NT$1.557 billion for July, down 8.53% sequentially and 5.75% on year. Consolidated revenues for January-July totaled NT$11.738 billion, up 42.39% on year.