Flat panel manufacturer Chi Mei Optoelectronics (奇美電) yesterday reported that net profits last year soared 918.5 percent to NT$36.08 billion (US$1.1 billion), or NT$5.25 per share, and expects business to continue growing this year.
This year will be Chi Mei's best since it entered the thin-film-transistor liquid-crystal-display (TFT-LCD) industry in January 2000, the company said.
"We are seeing strong demand throughout the year, especially in the second half, when a shortage of supply is expected," Chi Mei president Ho Jau-yang (
The Tainan-based company also raised its forecast capital expenditure to NT$100 billion this year from a prior target of NT$60 billion to NT$65 billion. This compares with a capex of NT$86.9 billion last year.
The additional NT$30 billion in capex would be used for the construction of a 8.5-generation fab, which will have a phase-one input design capacity of 30,000 motherglass substrates per month.
Equipment will be moved into the new fab in the science park in Luchu (
Ho said that although the US subprime mortgage crisis adversely affected sales of conventional televisions in the North American market, demand for flat-panel TVs remained strong, rising 46 percent from the Friday after Thanksgiving to the end of the Christmas holidays last month.
For this quarter, Ho predicted a 5 percent to 6 percent drop in shipments, but added that the minor slide in a historically slow season meant that demand remained firm.
Asked whether the severe snowfall in China would hurt sales or shipments, Ho said the impact would be minimal because most of the company's large-size flat TVs are manufactured in Taiwan.
"As a matter of fact, it might be beneficial to us: Inventories elsewhere are likely to drop," Ho said.
Chi Mei's shares closed at NT$37.3 on the local exchange yesterday, down 1.3 percent from Wednesday and before the disclosure of its fourth-quarter results.
The company reported a net income of NT$20.07 billion for the fourth quarter, which translates into earnings per share of NT$2.94, up 46.2 percent year-on-year.
Chi Mei also saw an 8 percent increase in its average selling price (ASP) in the fourth quarter, while shipments surged 11 percent.
Already a global leader in the wide TV panel market, Ho said Chi Mei would focus on expanding its share in the market for desktop and notebook displays this year by enhancing its 6G and 7.5G fabs' production capacities.
The company also expects its market share of 40-inch TV panels, which now accounts for roughly 25 percent of its shipments, to continue expanding given the rising popularity of large-size flat panel televisions.
But Chuang Shu-min (
"It is more accurate to get the picture from end-demand, and we are therefore cautious on that perspective," she said.
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