Solomon Systech Announces 2016 Interim Results
Unit Shipments Increase to 84.4 Million
- Unit shipments of mobile display ICs recorded an outstanding 92% increase, attributable mainly to the new touch display driver IC (TDDI).
- Unit shipments of PMOLED and bistable display driver ICs together went up by about 12%, attributable mainly to a number of design-wins with world-renowned wearable health and fitness devices.
- Total unit shipments up by 2% to 84.4 million units.
- New products ready to capitalize on expanding panel manufacturing capacity and growing markets.
(Hong Kong – 23 August 2016) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced today its 2016 interim results for the six months ended 30 June 2016 (“1H 2016”). The unit shipments of the Group’s Mobile Display ICs surged by 92% year-on-year, contributed mainly by the new touch display driver IC (TDDI), while its PMOLED and bistable display driver ICs together increased by 12% year-on-year, attributable mainly to a number of design-wins of world-renowned wearable health and fitness devices. Nevertheless, due to a significant decrease in unit shipments of its large display driver ICs, the Group achieved a year-on-year increase of about 2% in total unit shipments to 84.4 million units. Sales dropped slightly by 1% to US$32.9 million due to erosion of the average selling price (“ASP”) of certain products under intense price competition.
With lower than expected sales, an additional provision for net unrealizable fair value loss from investment under poor market sentiment and economic uncertainty, together with the one-off expenses resulting from an organizational realignment implemented during the review period, the Group recorded a net loss of US$6.4 million.
The Group has expanded its product portfolio during the review period, adding to it more new competitive products with strong potential.
The Group’s operations have been realigned into two business units, namely Main Display and Advanced Display, based on a customer-oriented strategy aiming to streamline and optimize resources, and to focus on products with a higher long-term value.
For the Advanced Display business, which includes PMOLED display and lighting products, as well as bistable products, growth momentum continued in the period under review. The total unit shipments of Advanced Display products increased by approximately 12% year-on-year to 64.1 million units.
A total of 8 new solutions have been developed, and both PMOLED display driver ICs and bistable display driver ICs have garnered a number of design-wins.
For the Main Display business, which covers mobile display ICs, including TDDI targeting smart mobile devices, as well as LCD display driver ICs for large display products, the total unit shipments amounted to approximately 20.3 million units, a 20% decrease year-on-year.
The Group’s mobile display ICs recorded an increase of unit shipments by 92% year-on-year to 16.3 million units, mainly attributable to the new touch display driver IC (TDDI) for FWVGA In-Cell panels. The Group has also developed a new TDDI for FHD LTPS In-Cell panels. Large display driver ICs, however, saw a significant drop in unit shipment due to reduced customer demand. Also, new products’ design wins were slow to contribute to the unit shipments.
New Products to Capture Expanding Markets
The Group will capitalize on markets with strong potential and develop for them new products promising to grow fast.
For Advanced Display, the Group has been developing new PMOLED products to address market trends. Mild growth is expected as supported by the expanded panel manufacturing capacity of the industry. With the onset of the Internet of Things (IoT) era, strong growth potential is anticipated for smart handheld devices in particular. The Group expects to see growth momentum from new applications and new key customers in the segment of bistable display business.
For Main Display, Solomon Systech’s new TDDI for FHD panels is expected to start pilot shipment stepping into the second half of 2016. FHD TDDI will become a mainstream product in the coming two years, and the Group expects substantial shipment growth from this segment. The demand for TDDI for FWVGA panels will remain strong in the near term. Meanwhile, the Group is also developing more new products for virtual reality devices. Last but not least, the Group is expecting good growth for its large display driver ICs, given the design-wins achieved by new products, new customer development and expansion of the market.
Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, concluded, “Looking forward, we will strive to fully exploit the opportunities arising in the high growth application segments. Worldwide LCD and OLED production capacity is expected to grow significantly in the coming two years, especially in China. Accompanying this expansion will be a rise in demand for TDDI and display driver ICs. We are also ready for the advent of the age of the IoT, as we are well-geared to grow with the support of our new and competitive products, and potential new customers.”