Chi Mei Optoelectronics Corp (
But company officials said the second-quarter loss is narrower than that of the first quarter and the company expects to return to profitability this quarter.
The Tainan-based company saw a second-quarter net loss of NT$1.68 billion (US$52.7 million), or NT$0.44 per share, compared with a net loss of NT$19.7 billion in the first quarter and net income of NT$9.01 billion a year earlier. Sales in the second quarter, however, grew 1.3 percent to NT$30.69 billion from last year and 14.9 percent from the first quarter.
Besides the lower-than-expected output by the 5.5-G fab as a result of technical problems, profit was eroded by the costs of goods, which amounted to NT$29.56 billion, according to the company's income statement.
Affected by the poor result, shares of Chi Mei fell NT$1.80 to close at NT$46.85 on the Taiwan Stock Exchange yesterday.
"We'll speed up moving part of our operation to China to save costs, as well as buying more cheaper parts from China," company president Ho Jau-yang (
While most flat-panel makers have shifted their module assembly to China, Chi Mei merely outsourced part of the operation to Westinghouse Digital Electronics (Ningbo) Ltd in China.
As a result, the company plans to file an application to the Ministry of Economic Affairs' Investment Commission to set up a liquid-crystal-display (LCD) module assembly plant in China, as Chi Mei has been proposing since last year, Ho said.
Chi Mei originally planned to cut its total costs by 5 percent to 10 percent in the first half of the year, but only reached 4 percent, Ho said. With the migration and sourcing plans, the company expects to lower its costs by between 5 percent and 10 percent in the next half of the year, he said.
The timetable, location and amount of investment are still under evaluation, company spokesman Eddie Chen (
While focusing on the production of flat panels for TVs, Chi Mei plans to increase shipment of panels used in computer monitors, as prices of these flat panels -- especially those of 19-inch panels -- have seen a significant surge caused by strong demand, Ho said.
Therefore, the company predicts a booming market in the second half of the year and aims to boost its production to 4.5 million units. It may even challenge the 5-million-units level, according to Ho.
The production in its 5.5-G fab, which is used to churn out mainstream 32-inch LCD TVs, will be increased after some technical problems are resolved, Ho said.
Ho estimated that world demand for LCD TVs will reach 21.5 million this year and Chi Mei hopes to earn 25 percent of the market share by the end of the year, up from the current 20 percent.
As a result of the strong market demand, prices will remain stable and keep companies profitable, he said.
"We are confident that we can turn around in the third quarter and start to make a profit in the fourth quarter," Ho said.
Because of the stronger-than-expected demand for LCDs used in personal-computer monitors that will help operating margins recover in the second half of the year, stocks of Chi Mei, along with its two largest rivals LG.Philips LCD Co and AU Optronics Corp (
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
Uber Technologies Inc, Lyft Inc and Airbnb Inc have slashed thousands of jobs. Salesforce.com Inc and Visa Inc are letting employees work remotely for months; Twitter Inc and Square Inc are allowing them to do so for good. For the companies’ hometown of San Francisco, the moves are early signs of a dire blow. In a city with a long history of booms, busts and natural calamities, the COVID-19 pandemic has suddenly upended nearly a decade of prosperity. While municipalities across the US are grappling with economic fallout from the virus, San Francisco stands to take a deeper hit given its high
BULK PURCHASE: The French chain and Hong Kong-based Dairy Farm International reached a deal covering 224 stores, which is expected to be finalized by year’s end Carrefour SA yesterday announced it would acquire Wellcome Taiwan Co (惠康百貨) for 97 million euros (US$108.33 million), and bring all the Wellcome supermarkets (頂好超市) and Jasons Market Place stores nationwide under its banner within 12 months of the deal closing. The France-based hypermarket chain reached an agreement with Hong Kong-based Dairy Farm International Holdings (牛奶國際控股), the pan-Asian retailer that launched Wellcome Taiwan in 1987. The transaction involves 199 Wellcome supermarkets, which have average sales areas of 420m2 and 25 high-end Jasons Market Place stores, which have an average sales area of 820m2, as well as a warehouse in Taoyuan, Carrefour Taiwan (家樂福)
‘ONE-STOP SHOP’: A Miaoli official said that the factory in the Jhunan section of the Hsinchu Science Park would create more than 1,000 jobs and boost prosperity A new high-end IC packaging and testing plant planned by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in Miaoli County is expected to start operations in the middle of next year, Miaoli County Commissioner Hsu Yao-chang (徐耀昌) said. Hsu wrote on Facebook that TSMC, the world’s largest pure wafer foundry operator, would invest NT$303.2 billion (US$10.1 billion) to build the plant, the largest-ever single investment in Taiwan. However, TSMC declined to disclose the financial terms of the deal, while a company board meeting on May 12 approved a spending plan worth NT$168.2 billion as part of its investment plans. Construction of the