AU Optronics Corp (
"Weakening panel prices indicate the industry is moving from shortage to oversupply," Goldman analyst Helen Huang said in a report dated Monday.
Panel prices for 15-inch notebooks fell this month for the first time in the past few months, according to Huang, who expects panel prices to fall 20 percent in the first half of next year.
Huang didn't change her target price of NT$35.7 (US$1.06) for the Hsinchu-based company. Shares of AU Optronics fell 6.9 percent, just shy of the 7 percent daily limit, to NT$45.6 on the Taiwan Stock Exchange.
"We warn against excessive expectations for LCD-TV demand in the first half of 2006, which is currently strong," Huang said in the report.
AU Optronics' closest rival, Chi Mei Optoelectronics Corp (
"Price falls and the downgrade got the market a bit jittery because AU's share price has risen over 30 percent since October," said Eric Lin (林宜正), an analyst at Yuanta Core Pacific Securities (元大京華證券).
"But I think it's still a good time to buy because of strong end demand," he said.
AU Optronics said after the stock market close that its sales in the first 11 months to last month hit a record of NT$192.8 billion (US$5.75 billion), up 24.6 percent from last year. Last month's sales rose 82 percent to NT$24.2 billion from a year earlier.