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In this paper, we propose a real-time hardware engine that performs the image halftoning as well as the photometric calibration for coping with nonlinear optical response of electrophoretic displays (EPDs). The engine quantizes an input image into fewer gray levels on the fly to accommodate the EPD characteristics. Since the number of available gray levels as well as the electro-optical response is temperature dependent, the engine performs adaptive image processing based on temperature dependent characteristics. The experimental results show that the performance of the proposed hardware engine meets the specification of real-time applications, and the quality of the displayed image can be significantly improved.