Chi Mei Optoelectronics Corp (奇美電子), Taiwan's second largest supplier of flat screens for computers and televisions, yesterday reported a narrower quarterly loss owing to the sale of a Japanese unit. The operating loss, however, widened as a supply glut further drove down prices, the company said.
"The situation will improve in the second quarter, as we are seeing exuberant demand for computer monitors and televisions now," company president Ho Jau-yang (何昭陽) told investors yesterday.
Recovering demand would help stabilize panel prices or even push prices up slightly in the current quarter, while shipments are expected to grow by 5 percent to 10 percent, Ho said.
"We are more sure about seasonal demand in the second half," Ho said, adding that supply and demand should largely reach parity this year.
Chi Mei Optoelectronics posted a loss for the second consecutive quarter. The loss for the three-month period to March was NT$1.97 billion (US$63 billion), or NT$0.52 per share, after the company posted its first loss in two years -- NT$3.5 billion, or NT$0.93 a share -- during the final quarter of last year.
The company earned NT$1.7 billion by selling its money-losing Japanese subsidiary, International Display Technology, to Sony Corp earlier this year.
Operating loss deepened to NT$2.5 billion from NT$2.34 billion as liquid-crystal-display (LCD) panels dropped another 10 percent last quarter from the previous quarter, the company said.
"The result mostly matches my expectation," said Frank Su (蘇穀祥), who tracks the flat-panel industry for BNP Paribas Securities (Taiwan) Co.
"As demand looks strong, Chi Mei should have a good chance of breaking even, or returning to profitability in the current quarter," Su said. He gave an "outperform" rating on the company with a 12-month price target at NT$78.50.
Shares of Chi Mei have climbed 28 percent to NT$53 on the Taiwan Stock Exchange since the beginning of the year.
Betting on better prospects for LCD-TVs, Chi Mei said it will resume construction of a 7.5-generation factory in June. The factory is similar to those being built by its rivals AU Optronics Corp (友達光電) and LG Philips LCD Co.
The new factory will crank out bigger glass substrates, which will be cut into eight pieces to make 42-inch (106.7cm) LCD screens for TVs, or six pieces to make 47-inch panels. It will have a monthly capacity of 30,000 glass substrates, Ho said.
The total investment will be close to NT$35 billion, he said.
Other capacity expansion plans are also underway, including a new 5G plant and an increase in production in the existing 5.5G fab. Capital spending for this year will be around NT$70 billion, the company said.
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