AU Optronics Corp (友達光電), the world's third-largest maker of flat-display panels for computers and televisions, yesterday unexpectedly lowered this year's financial forecast by a third, saying overcapacity-driven price decline is eroding profits.
The company revised downward its full-year earnings target for this year to NT$29.1 billion, or NT$6.07 per share, from NT$41.6 billion estimated in April. Revenue forecast will also slide to NT$162.4 billion from NT$186.97 billion.
"This is the fourth downcycle we experienced since we entered the flat-panel display business eight years ago," chairman Lee Kun-yao (李焜耀) told investors. "The trough came so swiftly as prices slid at a pace faster than we have expected."
The quick change would drag AU Optronics into a small loss in the fourth quarter of the year, Lee said, without elaborating.
In the June to September period, prices for large-sized liquid-crystal-display (LCD) panels have skidded over 30 percent, mostly due to price manipulation and speculation of lower panel prices in supply channel amid a supply glut, Lee said.
"But, we feel the prices are falling at a slower pace in the fourth quarter," Lee said.
He expected prices to trend lower by another 5 percent in the final quarter of the year, from the level late last month, when the price of 17-inch LCD panels fell to around US$175 apiece.
"It is really a shock. I didn't expect AU Optronics to suffer a loss that soon, despite a significant setback in earnings last quarter," said Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).
no defense
Since first-tier AU Optronics could not withstand the price erosion, Chi Mei Optronics Corp (
Last week, a smaller rival HannStar Display Corp (瀚宇彩晶) axed its financial forecast by nearly 70 percent, citing mounting inventory and non-stop price decline.
HannStar Display said pre-tax profits will reduce to NT$3.07 billion from NT$9.2 billion projected in April. Revenue will drop 33 percent to NT$40.05 billion from a previous estimate of NT$60.25 billion.
As panel supply is still ahead of demand, AU Optronics said it plans to scale back the monthly capacity of its advanced generation-six plant by 30 percent.
The company's sixth-generation (G6) fab will start mass production in the first quarter next year as scheduled, but this factory will only produce 60,000 glass substrates, rather than 90,000 units, said AU Optronics president Chen Hsuen-bin (
In addition, AU Optronics will start to build a new fifth generation (G5) plant in Taichung in res-ponse to slow demand for pricey flat-screen TVs, while keeping the planned generation-seven fab on hold, Chen said.
The spending on new facilities for next year will fall in a range between NT$70 billion and NT$80 billion, down from the planned NT$85 billion this year, the company said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last