According to an article in Digitimes, the demand for electrophoretic displays (e-paper) is on a global decline. The article explains this decline with lower sales of electronic book readers, with Toshiba, Sony and Panasonic leaving the market. In the US, Amazon is still the market leader and according to recent sales results, is doing well.
Digitimes attributes the downward trend to competition from tablets, a notion that is accepted by most analysts. E-paper displays like the ones made by E Ink, have other applications as well. So far, they have not been able to make up for the decline of ereader sales or show strong growth. The latest products using e-paper displays are smartwatches and smartphones, which could provide some growth in the future.
Looking at E Ink’s financial statements, we see a more or less constant net margin over the last few quarters. Looking at capital spending over the last few years, we can see that it is going down. The company cut its capital spending in half from 2012 to 2013 and will do so again in 2014. While E Ink has other product lines as well as electrophoretic displays, it shows that the overall demand for capacity at E Ink is not growing.
