E-paper solution provider E Ink Holdings (EIH) is doubling down on its capacity expansion projects, with plans to build an additional line at its plant in Hsinchu, northern Taiwan for ramping up output of related film materials for e-paper solutions.
The company disclosed earlier that it is expanding the production capacity of the Hsinchu plant and another in the US city of Boston, mainly for ramping up ESL (electronics shelf label) output and colored e-paper solutions for e-book reader and other new applications.
EIH is expanding its capacity in advance as demand for e-paper solutions will be much greater than expected in 2021, according to company chairman Johnson Lee.
The company's capital expenditure for 2020 may reach NT$1 billion (US$35.05 million), higher than NT$600-800 million over the past two years, Lee revealed, adding that total capex may range from NT$800 million to NT$1.2 billion in 2021.
Demand for materials for production of colored e-paper solutions is increasing rapidly as e-book reader developers are keen on rolling out new models with colored e-paper solutions and yet with larger sizes, Lee noted.
In addition to e-book readers, demand for e-paper solutions for e-notebook and signage board applications will be higher in fourth-quarter 2020 than that seen a quarter earlier, Lee added.
Meanwhile, the penetration rate of ESLs will also continue to rise in 2021, up from 5% currently, as more and more retailers worldwide have adopted ESLs to improve operational efficiency and to cope with labor shortages during pandemic-induced lockdowns, Lee said.
The company has reported net profit of NT$824 million for the third quarter of 2020, down 28% from a year earlier. However, net profit for the first three quarters of the year totaled NT$2.59 billion or NT$2.28 per share, compared to NT$2.47 billion or NT$2.18 a year earlier.