Investor Relations

Solomon Systech Announces 2011 Annual Results

Focused on Higher-growth Product Applications To Tap Surging Demand

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(Hong Kong – 21 March 2012) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced its annual results for the year ended 31 December 2011 (“2011”). 


In 2011, Solomon Systech’s sales amounted to US$51.6 million (2010: US$ 84.7 million), a decrease of 39% year-on-year due to a more cautious economic outlook translated into customer driven schedule delays and lower quantity orders. The Group recorded a drop in shipment quantity and the blended average selling price (“ASP”) of its products compared with 2010. Nevertheless, the Group’s efforts to improve product yield paid off and gross margin during 2011 maintained at 30.5% (2010: 30.2%). The book to bill ratio for 2011 stood at 1.0 (2010: 1.0).


Dr. Humphrey Leung, Managing Director of the Group, said, “Despite challenging market conditions, we made a number of positive steps forward in a few higher-growth product applications: smartphones, smart TVs and smart devices. These are also the areas in which the Group has focused on building competitive advantages. Our investment in the development of related advanced technologies and value-added solutions, such as capacitive touch panel driver ICs, high speed MIPI display interface controllers, e-paper technology for electronic shelf labels and also multimedia system solutions has bore fruit. We have laid a solid foundation for further development in the future.”


The Group maintained a healthy financial position, with total cash, bank deposits and equivalents totaling US$72.1 million as at 31 December 2011. To further enhance our technical competency in our focused areas and improve the quality and speed of new technology and product introduction, we continued to invest in R&D. The R&D expenses for 2011 was US$17.2 million, up 14% compared to 2010, representing 33% of total sales revenue.


To retain earnings for further business development, the Board of the Company has recommended no final dividend payment for 2011.


Business Review

The Group shipped a total of approximately 100 million display IC units during the period under review, a year-on-year decrease of 30%. The unit shipments of Mobile Display products decreased significantly. The fall off was not only the result of cautious outlook of customers, but also due to a shift in business focus taken by the unit from feature phones to higher-growth smart electronic products including smartphones and tablets. A number of these new products were still under development or have just been launched and have not been yet able to contribute significantly to business earnings. Nonetheless, the Group’s capacitive touch panel driver ICs has quickly accounted for almost 5% of the total unit shipments in only its second year of commercial shipment. Shipments of high speed display interface controllers for high resolution display applications started in Q3 2011, and the Group managed to win several potential high volume projects for the next two years.


For Advanced Display business unit, the e-paper display market experienced satisfactory growth, and the Group was able to secure additional electronic shelf label makers as customers. The Large Display business unit also completed design and qualification for source and gate driver ICs for large display panels for a major manufacturer. At the same time, the Display System Solution business unit garnered a significant number of design wins for products, including several internationally renowned pocket projector brands, advanced 3D active shutter glasses, smart watches, Android MID and drive recorder.


Our Green Power business unit recorded an impressive year-on-year rise in unit shipments for close to 50% in 2011, supported by growing demand for LED lighting modules. The business unit launched various new offline LED driver ICs and LED tube power modules, as well as achieved a number of design wins.


In August 2011, the Group invested in C2 Microsystems Inc. (“C2”), an IC design company specializing in the development and sale of multimedia System-on-Chip (“SoC”) solutions for Smart TVs. The investment represented a strategic move to generate synergies and broaden the Group’s product portfolio. Both parties have since worked closely together and we expect to have volume shipment in 2012 to bring in additional sales revenue.




Solomon Systech sees great potential in certain product applications, in particular smartphones & tablets, smart TVs and other smart devices. Having secured various design wins with customers in these segments in 2011, the Group is set to benefit from burgeoning market demand in 2012.


Focusing on Smart Products

Solomon Systech focuses on developing selected product applications where higher growth potential exists. Targeting smartphones with high definition, medium-size display and multi-touch functions, the Group is working on more advanced multi-touch display technologies and enhancing its MIPI display interface controller family. Separately, with the launch of the first smart TV incorporating C2’s SoC in early 2012, sales contributions from this segment will happen very soon. Meanwhile, capitalizing on the success of its pocket projector business, the Group will continue to incorporate C2’s technology into our system solutions for smart projectors that cater for booming demand from the commercial, education and home-entertainment markets.


The Group is also examining other smart devices. It plans to enrich its product portfolio to satisfy the needs of leading electronic shelf label makers by deploying e-paper display technology. As well, the Group aims to tap the intelligent LED lighting market by launching smart LED lighting power ICs and modules, targeting international brands and higher-growth mid- to high-end markets to open new revenue streams.


Enhancing R&D Capabilities and Extending Market Reach

Last year, the Group had eight patents granted for display driving IPs and two patent disclosures under draft for filling at patent offices in the USA, China, Taiwan and Korea.


In the coming years, the Design Engineering unit, which leads R&D operations for the Group, will strengthen collaboration with external parties such as academic institutions, relevant industries and government organizations to leverage their respective expertise. After the resources realignment during the year under review, the Group expects to achieve optimized performance and streamline methodology. This will also result in bolstering the Group’s design capability and quality, promoting development of more innovative technologies and products to support higher-growth product applications, as well as better serve the needs of customers.


“We see great opportunities in 2012 despite a slow market. We will continue to focus strategically on higher-growth product applications to generate more revenue and to strengthen our foothold. With strategies well in place, combined with enhanced technical competence and a seasoned team of professionals, we are ready to offer more innovative and high-quality products and system solutions to our customers, with the ultimate goal of achieving focused growth,” concluded Dr. Leung.


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About Solomon Systech (International) Limited

Solomon Systech (International) Limited and its subsidiaries as a Group, is a leading semiconductor company providing IC products and system solutions that enable a wide range of display applications for smartphones, smart TVs, smart projectors and other smart devices including consumer electronics products, portable devices, industrial appliances and green energy applications such as LED lighting.


Solomon Systech (International) Limited’s shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 8 April 2004 (stock code: 2878).


More information about the Group, its products and services may be obtained at


For Enquiries:

Solomon Systech (International) Limited

Strategic Financial Relations Limited
Jessica Lee

Tel: (852) 2207 1672


Veron Ng

Tel: (852) 2864 4831


Agnes Luo

(852) 2864 4851




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