Solomon Systech Announces 2017 Interim Results
Sales Increased 18% Year-on-Year to US$38.6 Million
- Total sales up 18% to around US$38.6 million.
- Gross profit surged 41% to US$14.7 million. Gross margin increased 6.4 percentage points to 38.1%.
- New technology centers set up in Korea and Taiwan to further enhance technology capability.
- Product and application portfolios strengthened to capture market opportunities.
(Hong Kong – 22 August 2017) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced today its 2017 interim results for the six months ended 30 June 2017 (“1H 2017”). Sales increased year-on-year by 18% to around US$38.6 million, while total shipments were up 7% to approximately 90.7 million units. Gross profit surged 41% to US$14.7 million. Gross margin rose 6.4 percentage points to 38.1%, attributed to a change in the product mix of the Group. Book-to-bill ratio for the period under review was 1.1.
A net loss of US$5.6 million was recorded during the period under review, due mainly to an increase in investment in product design, development & engineering (“R&D”); amortization of the cost of purchasing the maXTouch® technologies in 2016; as well as a provision made for slow moving inventories. The increase in R&D expenses was due to the new business operations and for developing an array of new products, of which some have been launched in the market, contributing to sales increase during the review period.
Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, said, “Our strategic initiatives in 2016 to expand product portfolio and strengthen technological capability have started to bear fruit. Both sales and unit shipments have increased. A total of 8 new products were launched during the review period and a number more are in the pipeline. We have set up technology centers in Korea and Taiwan, and also started preparations to establish another new technology center in Nanjing to further drive our business in China”.
For the Main Display business, which covers touch and display driver integration (TDDI) ICs, On-Cell and Out-Cell touch controller ICs, TFT LCD display driver ICs and MIPI bridge ICs targeting smart mobile devices, as well as LCD display driver ICs for large display products, the total sales amounted to approximately US$20.0 million, a 31% increase year-on-year. The sales increase was mainly attributed to the newly purchased maXTouch® touchscreen technologies from Microchip. maXTouch® touchscreen controller ICs have garnered design-wins and design-in projects with key international brands, and the technologies also achieve synergistic effects with the Group’s current technologies, including TDDI.
The Group has been developing new TDDI ICs aiming to capture the growing trend of bezel-less smartphones with an aspect ratio of 18:9. The Group’s MIPI bridge ICs have achieved design wins including a leading international notebook brand while the demand of its key customer for large display driver ICs has started to pick up.
For the Advanced Display business, which includes PMOLED display and lighting products, as well as bistable products and custom ICs, the total sales of Advanced Display products increased by approximately 6% year-on-year to US$18.6 million.
The growth momentum of the Group’s PMOLED display driver ICs continued in the period under review. Apart from garnering design-wins with a number of world-renowned brands, the Group has also further extended the application portfolio. The Group’s bistable display business has improved year-on-year, with design-wins achieved for custom ICs for ESLs, and also product application portfolio extended.
For Main Displays, the Group will strive to achieve more design wins with maXTouch® solutions, and also further enhance the development of new touchscreen controller ICs supporting flexible AMOLED displays, as well as new TDDI ICs targeting high-end smartphones with a bezel-less screen and an 18:9 screen aspect ratio. The establishment of the Nanjing Technology Center in the second half of 2017 is also expected to strengthen its R&D and supporting capability in China.
For Advanced Displays, the Group’s PMOLED display driver IC business is expected to continue to grow given the strong growth momentum of the wearables market. For the bistable display driver ICs, the Group will continue to target the ESL market, and also the other new applications boosted by onset of the Internet of Things (IoT) era.
Dr. Yeh concluded, “Looking forward, we foresee more of the positive changes attributed to our strategic moves in 2016 taking root. We shall leverage our array of new, high performance products to capture the growing market segments, in particular wearables, ESLs, and smart handheld devices; and also fully harness our strengthened technology capabilities to fuel product innovation, in particular with regard to promising technologies like flexible AMOLED and TDDI, to boost future growth.”