E Ink Holdings Inc said it is expecting only a modest increase in revenue in this quarter even though demand for Electronic Shelf Labels or ESL has been particularly good, Taipei Times reported. However, the one segment that it believes can cast a negative shadow on its bottom line is e-reader and e-notes as the company said it foresees a recession coming in the not-too-distant future. The same can make people spend less, which would eventually mean less of e-readers and e-notes sold.
“We are conservative about overall market demand next year, but we believe there is still a chance to grow,” E Ink chairman Johnson Lee told investors. “ESL would be the segment that outshines others.”
The company also stated it is expecting a seasonal slowdown in the next quarter. However, while that would mean a contracted revenue stream, that would be only on a quarterly basis before things start to pick up again to show better revenue on an annual basis.
“Retailers are facing challenges amid a high-inflation era as they have to adjust prices within a very short period. At this point, it is not easy to find entry-level workers when the economy reopens,” Lee said. “We have received ESL orders, but the uncertainty is whether they would install ESLs ahead of schedule, or delay it.”
Lee however said they are pinning high hopes on the US retail sector which he said is around 10 times larger than that of Europe. The company is expecting higher uptake of ESLs from the US next year. About e-readers and e-notes, it said it is expecting demand to remain low for some time but also stated the opposite could also be true on the back of the launch of new e-readers and e-notes featuring color E Ink displays.
The company also said efforts to expand capacity are progressing according to plan. This applies to its plans in the US, China, and Taiwan. Production capacity at its H4 production line in Hsinchu is slated to go up next year while there also are plans to set up a new production line (H5) at Hsinchu either in 2023 or 2024. Similarly, the H6 production line, also in Hsinchu is expected to commence production in 2025. However, plans to set up a new production line in Guanyin District in Taoyuan are being put on hold owing to the rise in the cost of materials as well as a shortage of labor.
With a keen interest in tech, I make it a point to keep myself updated on the latest developments in technology and gadgets. That includes smartphones or tablet devices but stretches to even AI and self-driven automobiles, the latter being my latest fad. Besides writing, I like watching videos, reading, listening to music, or experimenting with different recipes. The motion picture is another aspect that interests me a lot, and I'll likely make a film sometime in the future.
