LG.Philips LCD Co slashed its quarterly earnings forecast days after AU Optronics Corp (
Earnings before interest, taxes, depreciation and amortization would be about 10 percent of sales in the second quarter, half the company's previous profit margin estimate, LG.Philips, the world's second-largest liquid-crystal display maker, said yesterday in a regulatory filing. The Seoul-based company also halved its TV shipment growth forecast.
The revision, mirroring comments from AU Optronics last Tuesday, may raise pressure on panel makers to cut prices further after the increase in TV sales spurred by the world's most-watched sporting event failed to live up to companies' expectations.
Eroding profit margins may lead to industry consolidation, analysts such as JPMorgan Chase & Co's Bhavin Shah said.
"People are starting to accept that it's not going to be that easy to generate super returns in this sector," Shah, the highest ranked technology analyst in the latest Institutional Investor poll, said before the LG.Philips announcement.
"Some of the second-tier producers may consider giving it up," he said.
Shares of LG.Philips, down 23 percent this year, closed at 33,000 won (US$31), unchanged from the last trading session. The company announced its second-quarter revisions after the market's 3pm close.
LG.Philips said its second-quarter shipments of TV panels will probably rise 25 percent from the preceding three-month period, or half the growth it had projected. Overall shipments would increase about 15 percent, short of an earlier growth forecast for more than 20 percent, it said.
Second-quarter prices would fall about 15 percent from the first quarter, compared with an earlier forecast for a decline of less than 10 percent, the company said.
Inventory increased to about four weeks' worth of stock, more than the company expected, leading LG.Philips to scale back production, CFO Ron Wirahadiraksa said in a statement.
LG.Philips, which has budgeted 4.2 trillion won this year for capital spending, is also reviewing its total production capacity plans for this year and beyond, the statement said.
AU Optronics, the world's third-biggest LCD maker, last week halved its second-quarter TV shipment growth estimate to less than 10 percent. Prices will probably fall about 10 percent, double the pace projected seven weeks earlier, it said.
The company said in April that second-quarter TV shipments would rise 20 percent from the preceding three months, and prices would drop about 5 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”