With Walmart adopting ESL, E Ink is on a roll

May 18, 2023 By Sovan Mandal 1 Comment

E Ink Holdings Inc, the world's leading supplier of e-paper displays, is anticipating explosive revenue growth in the coming year. This surge is driven by the strong demand for e-paper displays used in electronic shelf labels (ESLs), particularly after Walmart Inc joined other retailers in adopting digital price tags, Taipei Times reported. E Ink's positive outlook follows an announcement from its strategic partner, SES-imagotag, regarding a new agreement with Walmart to deploy electronic labels in hundreds of stores across the United States.

Under this agreement, approximately 60 million digital shelf labels will be installed at 500 locations within the next 12 to 18 months, according to SES-imagotag. To meet the growing demand, E Ink has planned a multiyear capacity expansion drive, with the launch of its sixth production line in Hsinchu scheduled for the next quarter. Additionally, the company intends to construct a new production line in Hsinchu next year specifically for larger displays used in digital signage. E Ink currently holds a 5 percent stake in SES-imagotag.

E Ink Chairman Johnson Lee highlighted the reasons behind the increasing adoption of ESLs by retailers. He noted that rising labor costs and inflation are compelling retailers to adopt ESLs due to the frequent need for price tag updates. Walmart's adoption of ESLs is expected to pave the way for more North American retailers to follow suit.

In addition to color e-paper displays for ESLs, E Ink is making significant progress in the development of large e-paper displays for outdoor and indoor signage, as well as digital advertisements. The company plans to introduce color e-paper displays for outdoor signage later this year, utilizing its new Kaleido technology. Furthermore, it aims to implement its Spectra 6 technology by the end of this year or early next year for indoor signage and advertisements, pending readiness from its drive IC partners.

E Ink anticipates single-digit percentage revenue growth year-on-year for this year, consistent with its earlier projections in March. The demand for consumer electronics, such as e-readers, remains weak due to prevailing macroeconomic uncertainties, which restricts the potential for explosive growth this year. However, E Ink Chairman Johnson Lee expects such growth to materialize next year.

In terms of financial performance, E Ink forecasts a mild increase in revenue for the current quarter compared to the previous quarter's NT$7.23 billion (US$234.61 million), according to Chairman Johnson Lee. The gross margin is expected to improve from last quarter's 49.1 percent as the company anticipates higher shipments of materials, which yield better margins than modules. In the first quarter, E Ink experienced an 8.65 percentage point decline in gross margin compared to the previous quarter, reaching its lowest level in approximately three quarters.

During the last quarter, net profit expanded by 20 percent to NT$1.77 billion, up from NT$1.47 billion in the same period the previous year. This performance marked the company's best first-quarter result in its history, with earnings per share rising to NT$1.54 compared to NT$1.28 a year earlier.

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.

Filed Under: E-Ink, Clearink, Plastic Logic and E-paper News