Solomon Systech Announces 2018 Interim Results
Sales Increased 18% Year-on-Year to US$45.7 Million
Highlights:
- Total sales up 18% to around US$45.7 million.
- Total shipments increased 60% to approximately 144.9 million units.
- Gross profit remained almost flat at US$14.6 million. Gross margin was 32.0%.
- Positive outlook for second half of 2018 given the strong growth momentum of PMOLED and bistable display driver ICs, and also large display driver ICs.
(Hong Kong – 22 August 2018) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced today its 2018 interim results for the six months ended 30 June 2018 (“1H 2018”). Sales increased year-on-year by 18% to around US$45.7 million, while total shipments surged 60% to approximately 144.9 million units. Gross profit remained almost flat year-on-year at US$14.6 million. Gross margin dropped 6.1 points to 32.0%, mainly attributed to the lower selling prices at which certain old and obsolete stocks were sold, and the specific provisions made for slow moving inventories. Book-to-bill ratio for the period under review was 1.1.
A net loss of US$6.3 million was recorded during the period under review, due mainly to the drop in gross margin and a decrease in treasury income due to a less favorable investment environment during the first six months of 2018.
Business Review
The Advanced Display business, which includes PMOLED display and lighting products, as well as bistable products and custom ICs, continued its strong growth momentum during the period under review, and recorded an increase in the total sales by approximately 39% year-on-year to US$25.9 million.
The PMOLED display driver IC business of the Group was boosted by the expansion in production capacity of PMOLED display panels in the market, the trend of increasing adoption of PMOLED displays by bank keys, as well as the rapid growth of wearables and smart home appliances markets. The Group has garnered design-in projects for higher resolution grayscale displays for wearables and other applications, including medical devices, optical view finders, etc.
During the period under review, the Group has developed the world’s first ever PMOLED Touch and Display Driver Integration (“TDDI”) IC. It is believed to have marked an important milestone in the PMOLED industry and is set to become a significant revenue driver for the Group. The first sample of the product is ready for customer outreach.
The Group’s bistable display business has also seen strong growth leveraging the surging trend of store automation and the adoption of ESL in supermarkets and unmanned stores, particularly in the PRC.
For the Main Display business, which covers TFT LCD 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 remained almost flat year-on-year at approximately US$19.8 million.
The Group’s maXTouch® touchscreen controller ICs have achieved a number of design wins with major international smartphone/tablet brands. Its large display driver IC business has also seen satisfactory growth and development, with an increase in the share of the business of its key customer in Nanjing, and the Group has successfully designed-in a number of projects of its potential customers in Chengdu and Xianyang.
While the TDDI IC for FWVGA panel business has declined during the period under review, the Group’s shipment volume of TDDI IC for FHD panels has started to pick up in June.
Prospects
Looking forward, for Advanced Displays, the Group’s PMOLED display driver IC business is expected to continue to grow leveraging the anticipated growing demands from applications including wearable, bank keys and smart home appliances. Its ground breaking innovation of PMOLED TDDI IC is also expected to start pilot production by the end of the year. The Group’s bistable display driver IC business is anticipated to continue the strong growth momentum.
For Main Displays, both the Group’s touch controller ICs and large display driver IC are expected to continue their growth trends. Its key new product of foldable AMOLED touch controller IC, with samples ready by the end of 2018, is anticipated to help increase the Group’s share and positioning in the touch solutions market.
Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, said, “We foresee a positive outlook in the second half of the year. We are well positioned to capitalize on the growth trends of the key applications of our IC products. Our enhanced R&D capability and the key new innovative products launched and in the pipeline will help to drive future growth”.
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