Solomon Systech Announces 2024 Annual Results

Destocking Cycle Ends with Gross Margin Up 3.2 pp

Active R&D of New Products to Expand into New Markets

Large Display IC Revenue Surges Over 50%

Financial Highlights:

• Sales revenue was US$ 113.4 million
• Gross profit was US$ 38 million with gross margin up 3.2 pp to 33.5%
• Profit attributable to owners of the parent was US$ 10.1 million
• Shipment volume reached 293.2 million units in 2024

(20 March 2025 – Hong Kong) Solomon Systech (International) Limited (“Solomon Systech” or the “Company’’; Stock Code: 2878) announced its annual results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2024 (the “Year”).

In 2024, the global semiconductor industry faced an extremely challenging macroeconomic environment. A combination of factors, including geopolitical tensions, high inflationary pressure, and weak end-market demand, exerted substantial pressure on the industry. The Group’s shipment volume decreased by 12.7% year on year to approximately 293.2 million units due to delays in launching new product. After a period of adjustment, the market supply and demand has gradually restored a balance, alleviating the pressure for businesses to a certain extent. During the Year, the Group implemented a series of cost control measures, achieving a gross margin of 33.5%, an increase of 3.2 percentage points.

The Group’s sales revenue for the Year decreased by 25.9% year on year to US$113.4 million, driven by lower average product prices and reduced shipment volume amid ongoing price cuts of end products and industry competition. Profit attributable to owners of the parent decreased by 47.9% year on year to US$10.1 million. Earnings per share for the Year were 0.4 US cents. The Board resolved not to declare the payment of a final dividend for the year ended 31 December 2024.

Business Review

New Display ICs

During the Year, the market for three-color (E4) and four-color (E5) display labels was in a transition phase. As retailers awaited the launch of the next generation E5 display labels, sales of E4 display labels were affected. This, along with market competition, led to a decrease in the average selling price of the Group’s new display IC products. The Group supported E Ink in developing the Display IC Solutions for Spectra™ 3100, a next-generation specialised platform for electronic shelf labels and retail signage application. This has successfully enabled a four-color spectrum display which helped place the Group in a leading position in this vast market. The large-size four-color display labels supported by the Group’s IC products were launched on the market in the fourth quarter of 2023, while some models of the small-sized E5 display labels have completed the upgrade and commenced mass production in the fourth quarter of 2024. The Group will continue to upgrade the remaining models.

OLED Display ICs

The Group remained the world’s largest PMOLED display driver IC manufacturer, holding a dominant market share in terms of shipment volume in 2024. During the Year, the Group promptly seized the market opportunity of the significant increase in demand for OLED display ICs which was driven by the generation upgrade of certain high-demand electronic products. It contributed to a slight increase in the shipment volume of OLED display ICs. Additionally, the Group continued to promote its newly developed IC products that can support transparent PMOLED displays, with end products launched during the Year.

Mobile Display and Mobile Touch ICs

During the Year, sales of game console controller ICs were boosted by the launch of new games in the market. However, the shipment volume and revenue of the Group’s mobile display and mobile touch IC products significantly declined as other products in the segment were affected by the weakening personal consumption market. The Group pioneers the MIPI solutions for display with a series of proprietary features that support high-resolution, high-speed and low-power display of smart devices. During the Year, the Group co-developed a human interface display platform with a few leading small-to-medium-sized TFT-LCD panel manufacturers. This product is expected to enter mass production in the second half of 2025.

Large Display ICs

During the Year, the Group benefited from a series of home appliance subsidy policies introduced in mainland China, leading to a surge in the sales of large-size displays, including monitors and smart TVs. This contributed to a year-on-year growth of over 50% in both shipment volume and revenue for the Group’s large display ICs.  The Group has also been authorised by a major Chinese display manufacturer to develop a new generation P2P high-speed interface display driver IC. Prototypes for project validation are expected to be produced in the second quarter of 2025.

Regarding the medium and large-size electronic paper market, the Group successfully shipped large quantities of full-color electronic paper notebook driver IC packages during the Year. Co-developed by the Group, the full-color electronic paper notebook, which utilises the Group’s AMEPD driver IC for Advanced Color e-Paper Active Matrix Electrophoresis Display (ACeP) products, was launched in the second half of the Year. In addition, the Group completed validation for its ultra-large-size e-Paper learning whiteboards and ultra-large-size color electronic retail signage driver ICs in 2024. Both products will enter mass production in 2025.

Innovative Technology and Product Highlights

The Group keeps abreast with technological advancements and market trends, continuously focusing on innovative product development. Leveraging its technological edge and intellectual properties, the Group actively expands research and development collaboration to accelerate its entry into target markets and achieve promising returns in the less explored areas. In 2025, the Group will invest in the development of IC products supporting six or seven-color electronic display labels, with mass production scheduled for the second half of 2025. The color display technology will allow a wider range of applications for electronic display labels, potentially expanding the Group’s market reach and enhancing profitability.

During the Year, the Group actively pursued research and development to expand the application of mobile display and mobile touch ICs into a wider range of fields. The Group is currently developing a mini-LED backlight solution, with the FPGA development platform already completed and the production of a conceptual product confirmed by the customer. Following this, the Group will proceed to develop standard ICs. The product is expected to be launched in the second half of 2025 for automotive head-up display (HUD) applications.

In the large display IC segment, the Group continues to expand into the emerging automotive display market. The Group signed a memorandum of understanding on strategic cooperation with a Shenzhen automotive display manufacturer in 2023 and began cooperation in the design and development of the first automotive-specific integrated driver IC, which will be mass-produced in 2025 for application in major automotive systems.

Outlook and Strategies

Looking ahead to 2025, global inflation is expected to be under control and continue to ease. The benefits of an interest rate cut cycle may offset economic slowdown pressures, facilitating a soft landing. However, the Group remains a cautiously optimistic outlook due to the adjustment challenges posed by the rising protectionism and policy uncertainties. Across various market segments, existing products face pricing pressures, and supplier competition is intensifying. Prices of foundries are anticipated to remain stable or decline in 2025 and unlikely to increase prices.

The Group will increase resource allocation to develop high value-added new products and applications, closely aligning with market demand. By focusing on differentiated product development, the Group aims to enhance pricing power and boost profitability. Additionally, the rapidly growing electronic paper market, driven by technological advancements, continues to innovate with more vibrant displays, richer colors, and broader applications. Amid the environmental protection trends globally, the Group is confident in the future development of electronic paper and expects new product launches to deliver attractive returns, further improving its overall profitability.

Mr. Wang Wah Chi, Raymond, Chief Executive Officer of Solomon Systech said, “While consolidating our leadership in electronic paper display technology and other existing businesses, we are accelerating the commercialisation of display ICs in emerging applications such as automotive electronic systems and large-size electronic paper products. Leveraging our self-developed innovation capabilities and deep customer collaboration, we are actively expanding into high value-added markets such as automotive displays and e-book readers. In response to industry transformation trends, the Group will timely optimise its strategic product matrix, strengthen cutting-edge technology development, and maintain agile innovation capabilities to adapt to evolving market dynamics, ensuring our long-term leadership in the display IC sector.”

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