Print

Mail

wiki links

The picture is growing fuzzy at AU

Outlook * AU Optronics says shipments may fall 20 percent in the third quarter, with unit prices dropping 10 percent. * The company's chairman said he expects the TFT-LCD industry will improve in September, but refused to say by how much. * DisplaySearch says global sales of TFT-LCD panels will reach US$24 billion this year.

AU Optronics Corp (友達光電), the nation's largest maker of TFT-LCDs used in notebook computers and flat-panel displays, reported higher-than-expected profits for the second quarter yesterday, but offered a dismal forecast for the third quarter.

Profits at AU topped NT$3.9 billion, or NT$1.07 per share, nearly a tenth higher than analysts had anticipated. Sales rose almost 200 percent year-on-year to NT$22.7 billion as strong demand sent panel prices skyward.

"The company's core business performance was in line with expectations," said James Wang, TFT-LCD industry analyst at Merrill Lynch in Taipei. But the company's forecast points to an "anemic" third quarter, he added.

The number of panels AU Optronics sells this quarter will likely plummet 20 percent from the last quarter, with prices falling by 10 percent as well, according to Max Cheng (鄭煒順), director of finance at the company.

Cheng said July sales slumped 17.3 percent from the previous month to NT$6.14 billion and results for this month will likely be as poor.

AU Chairman Lee Kun-yao (李焜耀) blamed declining TFT-LCD panel sales on the sluggish notebook computer industry. Demand for flat-panel displays bundled with desktops remains brisk, he said, but the merger of Hewlett-Packard Co and Compaq Computer Corp has caused a drop in the amount of notebook models sold around the world, which is killing prices for notebook panels.

Lee predicted that the industry will improve in September, but refused to speculate by how much, as visibility remains limited. "Our top customers in the US and Japan will return, we're very confident of that," he said.

Analysts said they were surprised by the steep decline predicted for the third quarter. Most researchers had forecast a banner year for the TFT-LCD industry, as consumers swap bulky CRT monitors for slim, space-saving flat-panel displays.

Shipments for Taiwanese-made TFT-LCD panels is forecast to grow by 108 percent this year to 24.45 million units, while production value increases by 151 percent to US$6.4 billion, the Market Intelligence Center, a publicly funded industry researcher, predicted last month.

Lee said as many as a fifth of the company's TFT-LCD production lines could be shut down for repairs, retooling and equipment maintenance during the quarter. "We would rather stop production lines than sell panels at too low a price," he said.

The company will spend NT$40 billion (US$1.18 billion) over the next year to build and equip an advanced fifth generation production facility capable of producing larger sheets of glass from which TFT-LCD panels are cut. Executives said equipment will be installed in October and mass production should commence by the third quarter of next year.

AU Optronics is the largest TFT-LCD panel maker in Taiwan and third biggest in the world behind Samsung Electronics and LG.Philips, both of South Korea.
This story has been viewed 2260 times.