Good afternoon, everyone. Before diving into the quarterly results, considering that some of you may not have had a chance to visit our COMPUTEX booth in person, let me take this opportunity to give you a quick walkthrough of our key exhibition highlights and latest innovations.

As you can see from the screen, on the upper left is the BMW iX3 Flow. I'm sure you see a vehicle hood.

Basically, that's a car featuring E Ink Prism black and white flexible e-paper. It has passed BMW rigorous automotive qualification tests and is the world's first vehicle to adopt E Ink Prism and move toward mass production.

On the center left, the color concept car demonstrates the potential of Prism color e-paper for 3D surfaces and dynamic color changes. In the center background is the E Ink Marquee, a large-format outdoor color e-paper display scalable up to 136 inches featuring ultra-low power consumption, wide viewing angles, and wide temperature operation.

On the very left is E Ink Spectra, offering vivid full-color performance for indoor retail and commercial advertising with adoption by LG, Samsung, Sharp, and other global brands. Let's take a few seconds on the Safe Harbor statement.

All right. Next page.

Let me begin with an overview of our operating performance in the first half of 2026. Revenue for the first half reached NT$18.8 billion, representing year-over-year growth of approximately 1%.

Operating profit was NT$6.36 billion with an operating margin of 34%. Net profit totaled NT$6.52 billion, and EPS were NT$5.65.

The increase in non-operating income was mainly attributable to foreign exchange gains. The US dollar depreciated significantly last year first half due to the tariff impact, resulting a massive favorable year-over-year impact.

First half of this year, we reached a record high: revenue, operating profit, and net profit. Moving on to the next slide, we can see the trend in operating profit.

Operating profit for the first half, as mentioned earlier, was NT$6.36 billion, and the operating margin remained at approximately 34%, relatively flat compared with '25 level. Basically, year-over-year performance was relatively flat, as mentioned earlier, mainly due to the tariff-driven pull-in last year and higher memory costs this year.

We definitely continue invest in R&D and talent development, as research, development, and innovation remain the key drivers of our growth and long-term success. On the asset side, our total assets surpassed NT$100 billion in the fourth quarter last year and continued to grow steadily, reaching 120.9 billion in the second quarter of 2026, an increase of 22.7 billion or 23% year-over-year.

For the cash flow, cash and financial assets continue to increase in the second quarter, reaching approximately NT$80.3 billion. This page presents the growth trend in terms of the sales revenue and operating profit for the first half in the past few years.

Revenue first half of '26 reached 18.8 billion, more than doubling from the same period in 2021, basically representing six-year CAGR of 17%. This growth was primarily driven by the ongoing expansion of applications such as color e-readers, e-notes, ESL, and digital signage.

For operating profit grew from NT$1.3 billion in first half 2021 to 6.4 billion in first half 2026, basically delivering six-year CAGR of 38%. The reason behind, we continue to shift our strategy from module toward core e-paper materials, supplying this material to ecosystem partner to jointly expand the end application and market opportunities.

Next, let's look at our assets and financial position over the same six-year period. Cash and financial assets grew at CAGR approximately 21%, mainly supported by the steady cash flow generated from our core operation.

This has allowed us to build a strong financial position to support future capacity expansion and capital expenditures. For total assets, basically grew at CAGR of approximately 19%, reflecting our continued investment in new capacity and long-term growth initiatives.

Basically, in closing, would like to share with everyone that while the industry environment may experience short-term fluctuation, headwinds, unfavorable situation, but the long-term growth trend of e-paper remain unchanged, still quite intact, and we believe we will maintain solid, expanding growth momentum moving forward. This page, let's look at some of the latest applications of large-size color e-paper across commercial and public spaces.

Firstly, at InfoComm 2026, North America's largest professional audiovisual exhibition, we showcased our E Ink Marquee, a large-format tiled e-paper display. We are seeing e-paper gradually expand beyond niche applications and become an increasingly important option for next-generation digital signage.

When you see the screen in the lower-left image, that photo basically was taken in Taiwan. We can also see e-paper moving into a real-world public spaces.

Taoyuan International Airport, basically in Taiwan Terminal 2, has deployed a 75-inch Kaleido color e-paper advertising display. While waiting for their luggage, passengers can comfortably view advertisement and other information on the displays.

Since e-paper only consume power when the image is updated, it is especially well suited for the places like airports where information needs to remain visible for long period of time. This also demonstrate the potential of large-size color e-paper in digital advertising and public information displays.

Finally, in the retail and food service environments, e-paper can be used for menus, promotions, and brand advertising in many different locations because e-paper is thin, lightweight, and extremely power efficient. As you can see the image from very right-hand side, it does not require complex power routing typically needed for conventional digital display.

This makes much more easier to hang or install throughout a store, opens up a new opportunity in spaces when traditional digital display may not have been practical before. Several new e-paper application developed with our ecosystem partner during the recent quarter.

At the upper left, this is very Asian thing, locally Taiwanese thing, is the world's first e-paper blessing light, bringing low-power and heat-free technology into the traditional cultural application. Basically, those blessing lights are installed in the temple in Taiwan.

That's quite unique and a new application that we have been exploring. Also at the top center, one of our partners, iPolish, their smart nail can switch among up to 400 colors within five seconds, expanding e-paper into digital beauty and wearables.

At the lower left, once again, E Ink Prism color-changing e-paper is expanding from transportation and consumer products into architecture and smart surfaces. Also, you can see at the lower right, color e-paper digital frames combine a natural paper-like appearance with ultra-low power consumption for home and art display.

From culture, beauty to transportation, lifestyle, and art, this applications demonstrate the expanding possibilities of e-paper and our strategy of going new markets together with our ecosystem partners. We also would like to take this opportunity to share a video featuring LG's latest e-paper signage product.

Let's take a look. All right.

Let's move to the next page. As highlighted in our opening slides, we participated in COMPUTEX for the first time this year, joining hands with over 40 ecosystem partners.

Extremely honored that our Spectra 6 e-paper display system won the COMPUTEX Best Choice Award this year in the Smart City category. Also we made our debut at InfoComm, as mentioned earlier, North America's largest and most influential professional audiovisual and integrated experience exhibition.

Our latest and greatest technology: Marquee, Spectra 6, and Kaleido 3, and Prism, and been recognized by the global brands such as BOE, ViewSonic, and Sharp. Among them, Marquee basically also won at InfoComm Best of Show Award in the Digital Signage categories, recognized for its vivid colors, wide operating temperatures range, paper-like texture, and ultra-low power consumption, of course, carbon reduction advantages.

Last but not least, I would like to highlight our continued ESG performance over the past quarter. As you can see from the screen, we were included in S&P Global Sustainability Yearbook 2026 for the fifth consecutive year and also ranked as the world's top sustainability performer in the electronic equipment, instruments, components industry for second consecutive year.

Also, we achieved a significant improved FTSE Russell ESG score, received 100% green revenue recognition, also remained as constituent of the FTSE4Good ESG Index Series. For CDP, double-A rating for climate change and water security, basically both in A-list.

We maintain our supplier engagement leader rating. Its carbon reduction pathway also continued to be recognized by the TIPS initiative, the local rating institution, basically aligned with the Paris Agreement net-zero pathway and 1.5°C target.

Last but not least, for the local recognition, we ranked in the top 5% of Taipei Exchange listed company in Taiwan corporate governance evaluation. This is the fourth consecutive year.

If combined Taiwan Exchange and Taipei Exchange, we remained in the top 10 companies, especially in the category of capital exceeding NT$10 billion. This is on the second consecutive years, representing the highest evaluation tiers.

Okay. Basically, that is my update for the second quarter.

We can move to the Q&A session. Feel free to ask questions then.

Yeah. Hi there.

I just wanted to ask on your revenue run rate. I understand there's a lot of exciting products that your e-paper is going into, but your run rate of revenues this year is negative year-to-date.

I know there is a low base in the fourth quarter, but it seems like your growth targets of 15% to 20% seem very difficult to achieve now. I just wanted to check in and understand what that sort of top-line revenue outlook is for 2026 and 2027 and if it's changed.

Right. Rob, thanks thanks for the questions.

We just finished our earning conference in the the Chinese session 30 minutes ago, we basically gave a new guidance in terms of the sales revenue. I think last quarter, we gave the guidance for the whole year sales revenue.

The year-over-year growth is is around, 20% to 25%, stay around about 20%. Due to the increased memory cost, so that basically affect the year-over-year growth on our CE business segment.

Originally, we thought we could have grown higher single-digit for the whole year. Currently, the way we see it, we will not expect a growth, basically will we expect a decrease, single-digit decrease.

With this changes, we believe the whole year sales revenue guidance will be will be adjusted still still we will be growing, from 10% to 15% year-over-year growth. That that that's the first thing I would like to answer your your your first question.

Your second question, given the uncertainty in in in the CE market, it's a bit hard to anticipate what will be happening. Probably will still be relatively slow, but we are still quite confident on the IoT segment, that includes ESL plus signage.

Overall, it may still be too early to to say what will be happening next year. I personally believe we can still be expecting a a year-over-year year-over-year growth next year.

To what extent, it's hard to say at this moment.

Okay. Thank you.

All right. Thank you.

Hi, David.

Yeah. Hi.

Thank you for the call. Just a sort of a question on the sort of the memory cost for the Kindle.

As I understand it, the sort of standard Kindle uses the 16 gigs of NAND and maybe half a gig of DRAM. Just on that basis, the sort of the memory cost of a Kindle is maybe sort of $10 to $15 on the increased memory price.

That seems to be sort of quite manageable in comparison to the sort of the sales price of $140. Why are you sort of seeing a sort of such a big impact on the sales of Kindles this year?

In terms of passing on the extra memory cost, are you managing to pass on that extra memory cost, or are you taking a gross margin hit? Thank you.

Right, David. I kind of agree with you in the sense the first-tier player, such as Amazon, they would be less affected in terms of the memory cost, since they are relatively big player.

The way they prepare the inventory should be very robust. Let me put in this way.

For those players, it comes with the entry-level products and non-entry-level products. If the memory cost, the incremental portion against their total BOM cost is relatively higher, I think for that part, definitely will be affected.

Then apart from the first-tier CE players, customers, we also have the second-tier customers. Since the way they prepare the inventory or the resilience of the memory cost, the level of the resilience of memory cost may be relatively lower.

For that part, it also our sales revenue will be affected. For entry level, I think regardless of the first-tier or second-tier players, it will be affected.

That's kind of the situation I would like to explain.

Okay. Thanks very much indeed.

Just maybe if I could ask another question. Could you sort of give guidance on the sort of gross margin for this year and then maybe your guess for next year as well?

Right. I think historically this year, the gross profit margin stayed around I think 59%.

For second half, since CE business will be affected, the portion of the module business will be relatively lower. However, our signage business will be also growing.

Net-net, it's a bit hard to say the module and material product mix in the second half. I would say the whole year would be staying around 55% to 59%.

That's how I see it this year. Next year, I think if CE business will be picking back up, if we will be selling more module business, that basically our gross profit margin will be relatively lower.

However, our gross profit dollar will be increasing. Once again, it's hard to say the gross profit margin for next year.

We believe the gross profit dollar will still be healthily growing next year. Don't get tied up too much in terms of the gross profit margin.

I think we always aim to open up the e-paper market share. If the demand from CE is stronger, basically we will go for it.

We will not just, CE, the gross profit margin is relatively lower, we don't spend efforts on that. As long as the demand is there, we can open up our market share, we basically go for it.

Yeah.

Understood, and thank you.

All right. Thank you.

Hi, Kenny. Oh,

hi, Lloyd. Thanks for squeezing me in again.

I knew in Mandarin session you are not going to give very precise gross margin outlook, but can you give us some more color on there are a lot of moving parts for gross margin, but I want to try to understand that in the second half of this year, you said CE will be having some negative pressure because of the memory, but how would you manage more on that? Can you lower the percentage of module, but increase the percentage of material?

Because material won't be having the negative impact from memory, right? The pure impact should be coming from module assembly.

Is that correct?

Right. Kenny, as I mentioned earlier, CE business will not be that good in the second half.

I think we talked about that. ESL, we believe the growing momentum's still there.

In our Mandarin session, our CEO also give guidance the year-over-year growth for this year still 20% to 25%. Basically continue to grow.

For signage, it will be growing. What I'm trying to say is if the signage is growing relatively stronger, so that would slightly affect our gross profit margin in the second half.

However, our gross profit dollar will be increased. That's what I'm trying to say.

The capacity is ready there. If we have a more demand from the signage business, I think currently we still have a little bit room for the signage module business.

If that part is going well and even higher than our expectation, from the gross profit margin perspective, it would be affected a bit. However, the ASP for signage module will be higher.

That's still very healthy and helpful from the gross profit dollar perspective. That's how we see it.

In general, the way I see it for the whole year gross profit margin, I think it would be staying within the range of 55% to 59%. I think we didn't talk about this, but I think in this session, I kind of can give you a range.

Yeah.

I see. It's very helpful.

I just have another follow-up on the signage again. During the Mandarin session, you mentioned the mid-size seemed to have relatively stronger momentum compared with large size.

My understanding is that your utilization rate will be highly depending on the total area you are producing. Mid-size theoretically has average smaller size compared with large size.

Will this delay the pace that you fulfill the capacity of your H5 or even H6, or you see the total area still being growing, so that's not even an issue?

Kenny, I think for capacity expansion, I think is ongoing task. Basically, it will not be slowing down, and we do see the potential demand there.

Mid-size signage or large-size signage is hard for us to comment which one is more favorable, but basically as long as we can open up the market share, we will go for it. Coming back to your question, for the signage, I think eventually we will go for the material sales business.

Why? Because for the signage, module capacity is limited.

Eventually we will just simply supply the mother sheet, the big mother sheet, and leave our SI and their module partner to cut into the sizes they prefer. We see a positive growing momentum for signage business.

Yeah.

Okay. Understood.

Thank you very much. I'll get back to the queue.

All right.

Yeah. Hi, Lloyd.

Just a follow-up. You talked about the CE business and the sort of the difference in sort of Tier 1 and Tier 2 and sort of memory inventory management, which I guess makes complete sense.

Amazon would proactively manage inventory and obviously smaller players probably won't, and they're probably struggling to get hold of memory, let alone dealing with the price hikes. What's your split in CE between, say, Tier 1 and Tier 2?

For CE, let me put in this way. We have e-reader and e-note.

For e-reader, still relatively higher. Amazon definitely sit in that category.

For the e-note, few major players: reMarkable and other second-tier players in China. What I'm trying to say is I would say most of the customers in the e-note in terms of the size, they are still relatively smaller than Amazon.

Their inventory management capability, I wouldn't use the word weaker, but Amazon definitely is more superior than the rest of the player in this category. I think I'm not able to disclose a very very precise percentage split.

I would say first-tier, second-tier, I think second-tier still a bit more compared with the first-tier players. Yeah.

Okay. No, that's helpful.

I guess just as a follow-up to that is there is concern in the market that memory will be even tighter next year than it is this year. I guess those players that are struggling may continue to struggle.

You talked about CE recovering next year. If that's to do with memory, then that actually may not be the case, right?

It could get worse.

Right. It could get worse.

What we are hoping for is I think at the initial stage, our signage business relatively will be more on the module. Hopefully, the shortfall from the CE business maybe in the second half or in the next year can be made up from the signage module business as much as possible.

Yeah.

What sort of memory content does a signage product need relative to sort of e-readers and e-notes?

They do need memory. Since they are industrial purpose, it's a bit different, and the level of the shortage is relatively okay.

Yeah.

Okay. Yeah.

Thank you.

Thank you.

Hi, Catherine.

Hi. I'm sorry.

Can you hear me?

Yes, very well.

Yeah. Thank you.

Thank you for taking my questions. I joined a little bit late, I'm not sure if any other peers have asked these questions.

I just want to figure out how our gross profit margin is going to trend, because we mentioned earlier that we will ship more large signage in the future, but currently I'm sensing that our large signage is putting some pressure on our gross profit margin because the e-readers is probably getting higher margin than signage. I'm just wondering with more signage revenue contribution if our gross profit margin can keep at this high level, or is there any pressure on this?

Thank you.

Catherine. I think we believe the demand from the signage will be higher and higher.

During the initial stage, we still have some room for the signage module. Once it's full, basically we will change our business model from the module business to the material business.

I think at the current stage, it's sort of like a mixed mode. Some of the customer, they want us to supply the material for the signage.

The other want us to supply the module. That is the reason in the first half, it's a mixed mode.

Even signage business, some of them we still supply the material, the other is in module. It's hard to say what will be happening, but in the long run, definitely it will be switched from the module business to the material.

I think for the second half, I would reckon more module than material even compared with the first half. Even in second half, our CE business will be affected.

However, our signage module, I think, will be gradually growing. I think it's a bit hard to predict what will be happening in the second half, but the whole year, the gross profit margin for the whole year, I would say ranging from 55% to 59%, around this range.

Yeah.

That's

said, the second half, the gross profit margin compared with the first half would be relatively lower. Yeah.

Got it. Thank you.

My second question goes to maybe how do we think about the signage trend next year? Will it keep at the high growth rate like this year or even higher, or because of the relatively higher base, are we expecting the growth rate to relatively slowing down?

I think in our Mandarin session one hour ago, the guidance for the signage compared with the total sales revenue, the guidance we gave is higher single-digit, I believe ranging from 5% to 10%. One of the question being raised, when do we think it can grow to the double-digit?

Johnson, our CEO, just said probably next year. I think that can give you a good flavor how the growth can go.

I see. Got it.

Thank you. My final question, because we mentioned earlier that our CE is having some hiccup this year and because of the high memory prices, but it's actually transitioning into more 2B business.

Are we thinking of this as a chance that maybe later we have more 2B business, the overall either revenue or gross margin will be stabler, we have more focus on the future revenue, but not totally on the CE business? Can we think of this as this way?

Yeah. I think it's possible, cuz as I mentioned earlier, for CE, there are two major components in there.

One is reader. Of course, reader is relatively more relevant to the consumer.

For e-note, some of them is being used in education. I would say it will fit into the category of the B2B you just mentioned.

More and more e-note will be used as a B2B basis. I believe that's possible.

I personally believe in the future, there will be a thin line between e-reader and e-note. I think more and more maybe e-reader devices can be used for the education purposes.

The scenario you just mentioned, I think it's possible. Yeah.

Got it. Thank you.

Hi, Simon.

Hi. I just have a question on the ramp-up of the H5 line, and also how kind of the construction of the H6 line is progressing, any updates there?

Right. Basically, H5 has been performing better and better.

Basically contributing now in terms of the sales revenue. Not to worry too much.

For H6, we believe it would be ready by end of next year and we may need a quarter or two to make it better. That's sort of the timeline for H6.

Yeah.

Understood. For the H5 line then, regarding the yield rate, has that reached kind of your target by now, or...?

Yeah. I think from the large-size perspective, I think is satisfactory now.

Compared with the small-size yield rate, there's still a little bit room to catch up. I don't think we can make an apple-to-apple comparison like that because normally, large-size yield rate and small-size yield rate, to some extent, there should be some variances.

Yeah.

Understood. Thank you.

All right. Thank you.

We saw a few questions online. Hold on a second.

Question from Ben, a follow-up question to what someone asked earlier within CE. What's the broad split between e-reader versus e-note?

I think e-reader still relatively higher and more on first-tier players in e-reader categories. Can you talk a bit more around ESL penetration?

How has it trended through '26 versus '25? What are your ecosystem partner communicating to you in terms of the adoption and their expectation over the next 6-12 months?

For ESL, I believe the penetration is ranging from 20% to 25% globally. The year-over-year growth for '26 basically is 20% to 25%.

It's a bit hard to comment what will be happening in '27. I think for the time being, we probably can use the similar growth rate as we use for '26 for '27.

Yeah. There's another question from Josie about the H6.

It's about the cost. Do you target to produce signage at lower cost versus H5?

What is your target timing to achieve that? I think for H6, yeah, when the yield rate achieved the reasonable level, definitely the unit cost for H6 will be more competitive than H5, no doubt.

Given the lesson learned from H5, we believe the period to ramp up can be shortened. The target time, I think it's a bit hard to say.

We should get H6 ready first, and we may need a quarter or two to get it ready. There's the last question want to confirm the revenue growth guidance moving from 20% to 25% to 10% to 15% for '26.

That's correct. I come from back.

Okay. I believe there's no question, and I believe I answer all the online question already.

Thank you.

Thank you. Thank you.

Bye-bye.