(Yicai) Aug. 31 -- The core business of BOE Technology Group, China’s largest display panel maker, was under pressure in the first half of the year, as the soaring memory chip prices dampen demand for consumer electronics.

BOE’s revenue rose 1.8 percent to CNY103.1 billion (USD15.3 billion) in the six months ended June 30 from a year earlier, with revenue from the display devices business down 3.2 percent to CNY81.8 billion (USD12.2 billion), the Beijing-based firm said in its latest financial statement released on Aug. 28. Net profit expanded 62 percent to CNY5.2 billion (USD780.2 million).

Revenue from the Internet of Things innovation business rose 5.8 percent to CNY19 billion, and that from the smart healthcare and engineering business expanded 4.3 percent to CNY957 million. Revenue from the mini and micro light-emitting diode business and sensor business surged 47 percent to CNY6.4 billion and 88 percent to CNY420 million, respectively.

“At the industry chain level, the price of memory chips rose sharply due to the imbalance between supply and demand, pushing up the comprehensive cost of end devices and continuously compressing the profit margins of the industry chain,” BOE noted.

“At the industry level, the display industry entered a period of structural adjustment, market competition became increasingly fierce, and product technology iteration accelerated, continuously bringing operational pressure to display manufacturers,” the firm added.

Hit by surging memory costs, consumer electronics demand weakened this year, pushing down overall panel prices and putting pressure on manufacturers, Li Yaqin, general manager of market research firm Sigmaintell, told Yicai.

The display panel industry is expected to remain under strain in the second half, Li predicted, adding that the future performance of manufacturers will hinge on their progress in emerging growth segments, such as advanced packaging, Micro LED, and organic LED.

BOE’s stock [SHE: 000725] rose 1.5 percent to CNY6.01 (89 US cents) in Shenzhen today.

Editor: Futura Costaglione