Quanta Display had been aggressively expanding production before the planned merger, but analysts believe this may now change.
Local flat-panel suppliers reported billions of losses during the last downturn -- driven by overcapacity -- starting in the second half of 2004.
Credit Suisse First Boston's Wang said he had left unchanged his "buy" rating on AU Optronics, with a six-month target price of NT$62, which he may adjust.
Wang was positive about the merger, but said it was a pity that the deal would not address AU Optronics' weakness in the LCD TV panel area, as Quanta Display focuses on making flat panels for notebook computers.
After the transaction, AU Optronics will be still ranked the No. 4 TV panel supplier, after LG.Philips, Samsung and Chi Mei.
Wang trimmed his forecast for AU Optronics' net income this year by 4 percent to NT$29.8 billion, or NT$4.08 per share.
also see story:
Editorial: LCD merger the shape of the future
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