Tue, Sep 06, 2005 - Page 10 News List

AU Optronics' sales set a new all-time record

RECOVERY With its sales booming on high seasonal demand, AU Optronics -- the world's No. 3 maker of flat screens -- set a new record two months running


AU Optronics Corp (友達光電), the world's No. 3 maker of flat screens, yesterday said sales hit an all-time high last month on seasonal demand, signaling that the industry is on track for a recovery.

The strong result means Taiwan's biggest liquid-crystal-display (LCD) panel maker recorded record sales for the second month in a row.

AU Optronics said sales shot up to NT$20.14 billion, a 15.6 percent increase from NT$17.43 billion in July, or up 80 percent from a year ago, according to a company statement yesterday.

"The result falls well ahead of most analysts' expectations. That will negate the prolonged gloomy outlook about [whether industry players will have] the strength to sustain a revival," said Roger Yu (游智超), an analyst with Polaris Securities Co (寶來證券).

Yu has earlier forecast that local LCD screen makers, including AU Optronics, would post a mere 10 percent growth at a monthly pace.

Yu said huge losses posted by Taiwan's major flat-panel makers, including Chi Mei Optoelectronics Corp (奇美電子), in the first half cast a shadow over a budding recovery from the past year's oversupply-driven downturn, despite a recent rebound in panel prices.

The price of flat panels for 15-inch notebook computers rose 5.7 percent to US$148 in the first half of this month from two weeks ago, boosted by a surprisingly robust demand, market watcher WitsView said in its latest report released yesterday.

Prices of other LCD screens were stable in the same period, WitsView said.

Rising demand also pushed shipments of LCD screens for computers and televisions to hit a record high of 2.73 million units last month, up 11 percent from July, AU Optronics said.

Monthly growth slightly exceeded the firm's earlier projection of a 10 percent quarterly increase for the third quarter from the April to June period.

Shipments of slim screens for mobile devices leapt 29 percent, to 5.74 million units, fueled by seasonal demand for consumer electronics, AU Optronics said.

"Now we believe the industry will maintain a stable growth momentum in the quarters ahead," Yu said.

Frank Wang (王安亞), an analyst with Morgan Stanley, said AU Optronics' performance was "much better than I thought."

But short-term improvements would not be sufficient to lift his concern about a slowdown in the first quarter of next year, when LCD panel makers ramp up production to tilt the balance between supply and demand in a slow season, Wang said.

Wang maintains his Equal-Weight-V rating on AU Optronics with a target price of NT$55 for the next 12 months.

AU Optronics' share price fell 0.5 percent to close at NT$49.45 on the Taiwan Stock Exchange yesterday.

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