Solomon Systech Announces 2016 Annual Results
Unit Shipments Increase to 187.3 Million Units
- Total unit shipments up slightly by about 0.8% to 187.3 million units.
- Sales decreased slightly by about 3.5% to US$68.4 million.
- Unit shipments of TDDI (touch and display driver ICs) and PMOLED display driver ICs registered strong growth.
- Enhanced product portfolio and technological capability to pave the way for growth.
(Hong Kong – 15 March 2017) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced today its annual results for the year ended 31 December 2016 (“2016”).
In 2016, the total unit shipments of the Group increased slightly year-on-year by 0.8% to 187.3 million units, while total sales decreased slightly by around 3.5% to US$68.4 million. The Group’s TDDI (touch and display driver ICs) and PMOLED display driver ICs have registered strong growth which, however, was partly offset by a decrease in demand for its large display driver ICs, a decline in bistable display driver IC business and also erosion of the average selling price of certain products of the Group. The gross profit of the Group stayed flat year-on-year at US$23.5 million. Nonetheless, attributed to a change in the product mix of the Group, the gross margin rose 1.7% to 34.4%. Due mainly to additional investment in new products and technology, and an increase in administrative expenses subsequent to the organizational realignment implemented in 2016, the Group recorded a net loss of US$6.9 million.
Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, said, “In addition to organizational realignment to streamline and optimize resources, and to focus on products with a higher long-term value, we have implemented other strategic initiatives in 2016 to expand product portfolio and strengthen technological capability. These included the purchase of market-leading maXTouch® mobile touch technology assets, semiconductor products and patent licenses; enhancement of the new product development process; and also the establishment of new technology centers in UK and Taiwan to strengthen our foothold in the mobile touch business and our presence in the Asia Pacific region respectively.”
The Group’s operations have been realigned into two business units, namely Main Display and Advanced Display. The Main Display (MD) business covers mobile display ICs, including TDDIs, MIPI bridge ICs and the newly added maXTouch® On-Cell and Out-Cell touch controller ICs subsequent to a purchase deal in November 2016, as well as LCD display driver ICs for large display products. Despite strong growth of the TDDIs, the total sales of the Group’s MD business decreased by around 4.4% year-on-year to approximately US$31.6 million due to reduced customer demand for its large display driver ICs.
A total of 7 new solutions have been developed, including a TDDI for FHD LTPS In-Cell panels, and the world’s first single-chip TDDI supporting FHD IGZO In-Cell panels developed in collaboration with its key customer. The Group has also started the development of more new TDDIs leveraging the advanced maXTouch® technologies.
For the Advanced Display (AD) business which includes PMOLED display and lighting products, as well as bistable products and custom ICs, growth momentum continued for PMOLED display driver ICs in 2016, capitalizing on the strong growth of the wearables market, yet the bistable display business recorded a reduction in shipment and sales due to intense competition. The total sales of AD products decreased slightly by 2.9% year-on-year to US$36.8 million.
The Group has garnered a number of design-wins for its PMOLED display driver ICs with world-renowned brands of wearable health and fitness devices, and also expanded both the product and application portfolios. For bistable display driver ICs, the Group has secured design-wins for healthcare device, wearable and ESL applications, and has been engaged in a number of design-in projects for its new products.
For Main Displays, Solomon Systech is determined to leverage its new TDDI for FHD LTPS panels and the maXTouch® technologies and products to extend market reach to more key smartphone brands, and to develop next-generation products. The Group also plans to develop a new MIPI bridge IC tailored for virtual reality devices. Last but not least, the Group aims to further enhance collaboration with its key customer to push for growth of its large display driver IC business.
For Advanced Displays, the Group has been developing new PMOLED products to address market trends, and exploring other fast-growing applications. The Group will also further enhance its relationship with LCD module manufacturers and independent design houses to capture market opportunities. The Group expects to enhance its revenue stream by scoring more design wins and extending the applications of its new AMEPD solutions, as well as developing custom-IC for prospective customers of electronic shelf labels.
Dr. Yeh concluded, “Looking forward, we plan to continue to strengthen our investment in the burgeoning China market, in particular in Nanjing where our key customers and business partners are located. We shall also continue to invest in new technologies and to better leverage the local expertise of our new technology centers and offices to drive new product development and market outreach. We are well-positioned to move full speed ahead in 2017 to reap the fruit of the strategic moves we made in 2016.”