AU Optronics Corp (友達光電), the world's third-biggest flat panel maker, yesterday said that last month's revenues dropped 15 percent month-on-month on weakening demand as customers began tightly managing inventory ahead of the traditionally slow first quarter.
Revenues for last month came to NT$28.18 billion (US$862 million), bringing fourth quarter revenues to NT$94.64 billion, up 32.7 percent from NT$71.3 billion in the third quarter. The monthly result also amounted to a 14.6 percent expansion from a year ago.
Overall, AU Optronics said revenues reached a record high of NT$293 billion last year.
"These results were caused by certain customers' increasingly conservative inventory control as well as seasonal factors," AU Optronics said.
Declines
Shipments for computer and television thin-film-transistor liquid crystal display (TFT-LCD) panels also declined 12.8 percent to 5 million units last month from November, the company said.
During the period from October to last month, the output of panels for computers and televisions grew 31.7 percent quarter-on-quarter to 16.66 million units, the low-end of the company's projections.
Last month, AU Optronics cut its computer and TV panel output growth forecast for the fourth quarter of last year to 30 percent to 35 percent quarter-on-quarter, rather than the 40 percent it predicted earlier.
To cope with weakening demand, the panel maker also said it planned to reduce factory usage to 90 percent last quarter from full usage in the third quarter.
Smaller local rival HannStar Display Corp (
Revenues for last year rose 3.6 percent from 2005 to NT$64.79 billion.
"The outcome of the utilization cuts is encouraging, as it proves that with self-discipline, panel price drops can be kept small during the downturn," said Wang Wan-li (
Sustaining profits
Wang said if panel makers could sustain profits in the first half of this year, it would be a good year for the TFT-LCD industry.
Shares of AU Optronics and HannStar declined 1.43 percent and 1.62 percent to NT$44.8 and NT$6.08, respectively, on the Taiwan Stock Exchange yesterday, underperforming the 1.26 percent loss of the TAIEX.
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