Shares of AU Optronics Corp (
The South Korean slim-screen maker warned overnight that average panel prices will tumble nearly 20 percent quarter-on-quarter in the fourth quarter, faster than a 10 to 15 percent range forecast previously.
The company also expects continued downward price pressure in the first half of next year, LG Philips LCD said in a statement on Tuesday.
AU's shares were later bolstered by the company's optimistic forecast, but still declined 2.42 percent to close at NT$44.4 on the Taiwan Stock Exchange.
A Chinese-language business daily yesterday reported that resilient seasonal demand may carry into the next quarter, quoting AU vice president Hsiung Hui (熊暉).
An AU official confirmed Hsiung's forecast.
"We feel that panel demand for LCD monitors and LCD TVs is extending to December. We also feel a supply constraint for certain sizes," said Hsiao Ya-wen (
In the past, demand for slim-screen monitors usually peaked in November, Hsiao said.
"In such circumstances, AU's operation could hit the bottom in the first quarter. Price decline will slow down on improved demand," she said.
Shares of smaller rival Chi Mei Optoelectronics Corp (
"The renewed concern about further price decline triggered a sell-off of shares of AU and its local competitors from cautious investors," said Kevin Chung (
Overseas investors sold a net of 8.59 million AU shares yesterday alone, according to stock exchange statistics.
Ken Yu (
"The ball is in the South Korean companies' court," Yu said.
LG Philips LCD, which has been a major price killer since the third quarter, is still capable of waging new price wars because it is making profits, Yu said.
On the contrary, AU is expected to swing into a loss in the fourth quarter as panel prices have already dropped below cost, Yu said.
"Recent signs did point to an improvement in demand, but it is hard to say when the prolonged price decline will end," Yu said.
Yu forecast that the Taiwanese company would post a smaller-than-expected loss of NT$700 million, or NT$0.14 a share, for the current quarter.
AU projected in October that the quarterly loss would be around NT$1 billion.