Solomon Systech Announces 2017 Annual Results
Sales Increased 21% Year-on-Year to US$82.5 Million
- Total sales up 21% to US$82.5 million.
- Total unit shipments increased 15% to 215.2 million units.
- Gross profit up 25% to US$29.3 million. Gross margin percentage up 1.1 points to 35.5%
- Established Solomon Systech (China) Limited in Nanjing, setting an important milestone for China business development.
- Further enhanced product portfolio and technological capability to pave the way for growth.
(Hong Kong – 13 March 2018) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced today its annual results for the year ended 31 December 2017 (“2017”). Sales increased year-on-year by 21% to around US$82.5 million, while total shipments were up 15% to approximately 215.2 million units. Gross profit increased by around 25% to US$29.3 million. Gross margin rose 1.1 percentage points to 35.5%. Book-to-bill ratio was 1.1.
A net loss of US$10.3 million was recorded, mainly due to a one-off write-off of obsolete inventories, and an increase in the Group’s investment cost and related amortization expenses for the development of an array of new products, of which some have been launched in the market and contributed to the sales increase in 2017.
In 2017, the Group has continued to invest in enhancing technological capability and bolstering product innovation. Apart from setting up the Korea technology Centre and further strengthening the Taiwan Technology Center, the Group has established Solomon Systech (China) Limited (or Nanjing Technology Center (NJTC)) in Nanjing Jiangbei New District to drive business development in the burgeoning China market.
In addition, the Group has launched a total of 13 new products, and also garnered design-in projects and major design-wins with international brands that are expected to start mass production in 2018.
Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, said, “2017 was for us a year of building and investing. Apart from the significant milestone of setting up the Solomon Systech (China) Limited in a strategic location, we have been building a strong product portfolio and achieving product differentiation. We have also invested in strengthening our customer base to drive growth. We see that these efforts are starting to bear fruit, get us better positioned for 2018 and beyond.”
The Main Display (MD) business covers mobile display ICs, including Touch and Display Driver Integration (TDDI) ICs, In-Cell, On-Cell and Out-Cell touch controller ICs, TFT LCD display driver ICs for smart mobile devices and large display products, as well as MIPI bridge ICs. The total sales of the MD business surged by about 31% year-on-year to approximately US$41.3 million (2016: US$31.6 million). This was mainly attributed to the contributions of In-Cell TDDI ICs, touch controller ICs and large display driver ICs.
The market leading touch controller ICs managed to score design wins and design-in projects with key international brands, of which some are expected to start mass production in 2018. The Group’s In-Cell TDDI IC for narrow bezel Full High-definition (FHD+) (1080 x 2160) display has been designed-in smartphones by some independent design houses, while a breakthrough TDDI IC supporting FHD+ (1080 x 2160) In-Cell LTPS panels has been developed, aiming to capture the new market trend of high resolution smartphones with a bezel-less screen and a higher aspect ratio. The Group has also successfully designed-in its large display driver ICs for TVs of different resolutions, and has been enlisted as a qualified supplier of a new customer.
For the Advanced Display (AD) business which includes PMOLED display and OLED lighting products, as well as bistable products and custom ICs, growth momentum continued in 2017. An increase in total sales of about 12% year-on-year to approximately US$41.2 million (2016: US$36.8 million) was recorded.
The Group’s PMOLED display driver ICs has garnered a number of design-wins with world-renowned brands of wearable health and fitness devices. For the bistable display driver IC business, the Group has capitalized on the trend of unmanned stores and increasing automation of supermarkets and stores, in particular in China, to grow the ESL applications, and also further extended its application portfolio to keyboards, scoreboards, tags for logistics asset management, etc. to increase the revenue stream.
For Main Displays, a number of key design-wins and design-in projects the Group’s touch controller ICs garnered in 2017 are scheduled to commence mass production in 2018 to boost revenue. The Group will also strive to achieve more design-wins in particular for its touch controller ICs for AMOLED panels and also the new TDDI solutions. Moreover, the establishment of the NJTC is expected to enhance both the Group’s collaboration with its current customer, as well as efforts in reaching out to new customers.
For Advanced Displays, the growing wearables market is expected to underpin the business growth of PMOLED display driver ICs. The Group is also ready to capture the new trend of color wristband displays, and extend the applications to smart handheld devices and smart home appliances. In terms of bistable display driver ICs, the Group will leverage the growing adoption of ESL, and the surging trend of supermarket and store automation to drive growth.
“Now that we have a strong and focused global R&D team, strategically located business and technology centers, and an exciting pipeline of new products launched and in development, 2018 looks to be an exciting year of great potential for the Group,” concluded Dr. Yeh.
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