E Ink has said it is embarking on a capacity expansion drive to boost the production of e-paper modules and flexible films, Taipei Times reported. The company said it has earmarked NT$3.31 billion (US$110.4 million) for investment at its plant in Taoyuan city in Guanyin District. Then there is another 3.25 million yuan (US$479,400) that the company plans to infuse into its plants in Yangzhou, Jiangsu Province in China.
E Ink said it has been facing a surge in demand for E Ink panels which has been consistently higher than what it is able to match with its current production standard. Much of the demand has been for electronic shelf labels or ESL than e-paper modules that go into the making of e-readers and e-note devices. This again is being attributed to higher inflation rates raging in most parts of the world that have driven the cost of products higher, forcing consumers to adopt a more cautious approach towards spending.
E Ink is expecting demand for e-readers or e-ink modules to be lower by 10 percent this year even though the company is upbeat about the future growth prospect of this segment. However, demand for ESL continues to be robust as more retailers across the world adopt these smart labels to replace paper shelf labels. The company has projected the ESL penetration rate to surge past 10 percent this year compared to about a 5 percent rate for the past few years. The ESL market size is estimated to eventually reach 30 billion to 40 billion units.
“We are relatively positive about our business outlook,” E Ink chairman Johnson Lee told an online investors’ conference. “With more capacity coming online, we expect the third quarter would be better than the second quarter. The fourth quarter would also be better than the third.”
E Ink had earlier reported a profit of a record NT$2.37 billion in the last quarter which is 71 percent higher than what it was for the same period last year. The company’s profit for the first half of the year stood at NT$3.84 billion, which again is a 50 percent improvement over the NT$2.56 billion it has been last year.
(adsbygoogle = window.adsbygoogle || []).push({});
The post E Ink plans to increase production capacity first appeared on Good e-Reader.