Solomon Systech Announces 2025 Interim Results

Shipment Volume Up 22.4% from 2H 2024 with GP Margin Remaining Healthy YoY

Financial Highlights:

• Sales revenue was US$ 45.9 million
• Gross profit was US$ 18.2 million with a gross margin of 39.6%
• Profit attributable to owners of the parent was US$ 4.0 million
• Shipment volume reached approximately 150.8 million units in 1H 2025, up 22.4% compared to 2H 2024

(13 August 2025 – Hong Kong) Solomon Systech (International) Limited (“Solomon Systech” or the “Company’’; Stock Code: 2878) announced the interim results of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 30 June 2025 (the “Period”).

In the first half of 2025, the global economy operated under the shadow of extreme trade policies and tariff measures introduced by the United States. Geopolitical tensions and intensified technological competition, coupled with subdued end-market demand, exerted downward pressure on the industry. The Group’s shipment volume decreased by 11.3% year on year to 150.8 million units, while increasing by 22.4% compared to the second half of 2024, due to the delayed launch of the latest generation of products during the Period. With effective cost control and product mix optimization, the Group’s gross profit margin remained healthy at 39.6% in the first half of the year.

Continued price reductions in end products, combined with heightened industry competition, resulted in a lower average selling price. Consequently, with reduced shipment volume, the Group’s revenue fell by 25.8% year on year to US$45.9 million. Profit attributable to owners of the parent decreased by 46.4% year on year to US$4.0 million. Earnings per share for the Period were 0.16 US cents. The Board resolved not to declare any interim dividend for the six months ended 30 June 2025.

Business Review

New Display ICs

The Group collaborated with E Ink to develop an innovative display IC solution for the next-generation specialised platform, Spectra™ 3100, designed for Electronic Shelf Labels (ESL) and retail signage. This advancement enabled four-color display capability. During the Period, the market completed the transition from three-color (E4) to four-color (E5) electronic display labels, and the Group successfully updated the specifications for all models of its four-color display labels.

In early April, the United States imposed reciprocal tariffs on nearly all major economies, subsequently announcing a 90-day grace period before enforcement. During this window, retailers accelerated orders in anticipation of rising costs, which drove increased demand for electronic display labels and led to higher shipment volumes of the Group’s new display IC products.

OLED Display ICs

The Group is the world’s largest supplier of PMOLED display driver ICs, maintaining a dominant market share based on shipment volume during the Period. Although shipment volumes and revenue from the Group’s OLED display ICs declined during the Period, effective cost control allowed the gross profit margin to remain stable compared with the second half of 2024.

During the Period, the Group continued to promote its newly developed IC products that support transparent PMOLED displays. Transparent PMOLED is an emerging technology with promising applications in end products requiring see-through displays, such as diving masks and golf ball tracking eyewear. The Group is also a pioneer in mini/micro-LED applications. Since 2018, its mini-LED DDI solution for 50- to 100-inch indoor display signage has been in mass production and is currently in use in curved display panels at underground stations in the UK and the US.

Mobile Display and Mobile Touch ICs

The Group’s Mobile Display and Mobile Touch IC products experienced a notable decline in both shipment volume and revenue during the Period, largely due to delays in the launch of new products. While sales of game controller ICs received a boost in the second half of 2024, spurred by the release of new games, the current generation of mainstream gaming consoles has been on the market for several years. With no new models introduced, the market has become somewhat saturated, leading to a slowdown in demand for game consoles and controllers.

Large Display ICs

During the Period, fierce competition in the large display market—encompassing monitors and smart TVs—resulted in a significant decline in both shipment volumes and revenue for the Group’s large display IC products. The Group will accelerate the upgrade of its product portfolio by introducing more high-end products, including high refresh rate commercial and gaming monitors, as well as high-resolution televisions, to enhance future revenue growth.

In the medium to large e-paper market, the Group continued to ship full-color e-paper notebook driver IC sets during the Period. With increasing market penetration of end products, IC shipment volumes are expected to rise further in the second half of the year. The full-color e-paper notebook, developed in collaboration with the Group, launched its first end product in the second half of 2024. This product features the Group’s Active Matrix Electrophoretic Display (AMEPD) driver IC, designed for advanced color e-paper ink screens (Gallery).

Innovative Technology and Product Highlights

To address the temporary pressure on product shipment volume and revenue, the Group has positioned technological breakthroughs as its core driving force, actively expanding into new application areas, promoting product diversification, and advancing product portfolio upgrades. In terms of New Display ICs, the Group is currently developing IC products to support seven-color (E5 3-bit) electronic display labels, with prototype production planned for the fourth quarter of this year. The introduction of full-color displays is expected to broaden the range of potential applications, further driving adoption. Beyond ESL, the Group is also actively exploring the extension of color e-paper display technology into other areas, including electronic photo frames for various products and electronic name badges capable of displaying images for user identification.

Regarding OLED Display ICs, the Group launched the world’s first small-sized passive micro-LED display driver IC – the SSD2363 in 2023. At present, the IC is primarily being used by customers for validation and testing of micro-LED functionality in their end products. The Group is also actively engaging with a range of prospective customers with a view to deploying this product in high-value applications, such as automotive devices.

For Mobile Display and Mobile Touch ICs, the Group is actively pushing the boundaries of technology. At present, the Group is working on a mini-LED backlight solution. The FPGA development platform has been completed, and the production of a conceptual product has been confirmed by a customer. The Group is now developing a standard IC, which is expected to be launched in the second half of 2025, targeting applications such as automotive head-up displays (HUDs).

For Large Display ICs, the Group has established a comprehensive presence in the medium to large e-paper ecosystem. During the Period, full-color e-paper notebook driver IC sets continued to ship steadily as market penetration increased. The validation of driver IC sets for extra-large e-paper learning whiteboards and extra-large color electronic retail signage (Spectra 6) has been completed, with mass production expected to commence in the second half of the year. Additionally, driver ICs for portable black-and-white e-book readers are expected to launch as IC prototypes in the second half of the year. This positions the Group to fully capture the emerging demands of diverse user segments in the e-paper market.

The Group will continue to expand into the emerging automotive display sector. In 2023, the Group signed a memorandum of understanding on strategic cooperation with a Shenzhen-based automotive display manufacturer and has commenced collaboration on the design and development of its first automotive-grade integrated driver IC. This product is scheduled for launch in 2025 and will be used in mainstream automotive systems.

Outlook and Strategies

Looking ahead to the second half of the year, the unpredictability of US trade policies is leading businesses to adopt more cautious strategies. Tariffs are also expected to push up inflation in core goods and related services, likely causing a short-term slowdown in global economic growth.

In the first half of the year, US importers, concerned about substantial tariffs, stockpiled large quantities of goods in advance to avoid the impact. With this demand now largely fulfilled, related sales in the US may decline in the second half of the year.

In addition to accelerating progress on delayed products, the Group has allocated additional resources to developing new products in order to broaden its market reach. It is launching products tailored to meet demand within each market segment, addressing diverse consumer needs. The Group possesses ample resources to develop promising products that will maintain its long-term competitiveness. As new products are gradually introduced to the market, the Group believes they will drive both shipment volumes and profitability. The Group will also continue to closely monitor market developments and promptly adjust its product strategies as necessary.

Mr. Wang Wah Chi, Raymond, Chief Executive Officer of Solomon Systech said, “Firstly, we will accelerate the commercialisation of products to unlock growth potential more rapidly; and secondly, continue to increase investment in R&D to drive innovation and expand market reach. These initiatives are expected to provide strong support for the Group’s steady and sustainable development. With a robust technological foundation and the agility to adjust strategies swiftly, we are confident in our ability to drive future growth through innovative products. We will continue to monitor market trends closely and optimise our product portfolio to strengthen long-term competitiveness amid market fluctuations.”

– End –