AU Optronics Corp (
The company is expected post a loss of about NT$260 million (US$7.5 million) compared with net income of NT$2 billion a year earlier, analysts said.
Sales, announced earlier in monthly reports, fell to NT$17.1 billion from NT$19.7 billion.
AU Optronics may have turned profitable toward the end of the quarter, helped by rising demand and lower costs, analysts said.
The company, which reports results tomorrow, said in February it raised prices for customers including Dell Computer Corp by about 6 percent after it was unable to meet demand for computer monitor screens. Still, supply from new factories AU Optronics and rivals such as Samsung Electronics Co are opening, may hold back prices later this year.
"In January, the company probably made a loss, in February it probably broke even and in March may have generated some profit," said Martha Chen (
The company's local suppliers of parts and materials are cutting prices, which has helped the company lower its production costs, Chen said.
Demand for flat-panel displays used in personal computer monitors rose after the price of a benchmark screen measuring 15 inches diagonally fell to about US$175 in January, or more than a third since June.
The company said in January it was using about 90 percent of capacity and in February it raised prices for its 15-inch screens by US$10 to about US$185.
Personal computer manuracturers such as Dell have been buying more flat-panel monitors as consumers increasingly switch from bulky glass tube-based monitors.
AU Optronics is the first company in the country to start production from a new factory that promises to boost shipments this year by about 50 percent. The factory will use so-called fifth-generation equipment that cuts costs by increasing the number of screens that can be cut from a single sheet of glass.
South Korea's Samsung and LG.Philips LCD Co, the world's largest suppliers, have started production from their first fifth- generation factories.
Chi Mei Optoelectronics Corp (奇美電子), the nation's second-largest supplier, will start its first fifth-generation plant in the second half.
Chi Mei earlier this month forecast its net income this year will fall by 83 percent from last year on expectations that oversupply starting in the second half will force prices to fall.
AU Optronics said it plans to spend about US$1 billion this year to meet growing demand for flat-panel televisions. The company said this month it also plans to build a US$2.9 billion factory in central Taiwan that will start production in 2005.
The market for flat-panel displays will double from US$33 billion this year to US$67 billion by 2007 on demand for screens used in TVs, according to Austin, Texas-based market researcher DisplaySearch.
It expects the retail price of flat-panel TVs to fall as more suppliers enter the business.
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