Sharres in AU Optronics Corp (友達光電) declined nearly 1 percent yesterday as speculation about a significant drop in sales last month offset positive impact from growing orders for its new touch panels business.
The stock price of the nation's top liquid-crystal-display (LCD) panel maker slid NT$0.6, or 0.98 percent, to NT$60.7, despite a Chinese-language Economic Daily News report yesterday that the company has landed orders of red-hot touch panels used in mobile phones, laptop computers and global positioning devices.
The benchmark TAIEX index fell 0.58 percent pace yesterday.
"We are certainly positive about it [receiving touch panel orders], but the contribution will be minimal this year, or merely about 1 percent of AU Optronics' overall revenues," said Eric Lin (
The global touch panel market is expected to reach US$3 billion this year, up 7 percent from US$2.8 billion last year, as more handsets will be outfitted with touch screens following the sale of "iPhone" by Apple Inc, according to Taipei-based Topology Research Institute's (
AU Optronics told investors in January that it planned to start shipping touch panels late this quarter at the earliest. The size would be smaller than 10 inches, it said.
However, recent speculation about a drastic 30-percent monthly decline in sales last month because of a price drop and falling shipments stemming from the snow storm in China could be a major factor dragging down AU Optronics share prices, Lin said.
Lin was more optimistic in forecasting a 15 percent to 20 percent decline in sales last month, compared with NT$47 billion sales posted for January.
AU Optronics yesterday also said it is interested in buying a fifth-generation (5G) color filter plant from bankrupt Allied Material Technology Corp (
"Allied Material intends to sell its 5G plant, including facilities and equipment, to any electronics companies and it has reached an initial agreement with interested parties for sale," Allied Material said in a filing to the Taiwan Stock Exchange yesterday.
AU Optronics declined to comment on the report, which said the deal could be worth NT$4 billion (US$129 million).
"The NT$4 billion would be a bargain deal, compared with the NT$12 billion [Allied Material] spent on building the plant," Lin said.
AU Optronics, along with its five local peers, were recommended an "outperform" rating by Macquarie Research in a client note issued on Monday, citing six reasons including rebounding panel prices, limited global panel supplies in this year and the next, as well as the lean inventories industrywide.
The other three reasons were the six panel companies' low valuations compared to their global rivals, a rising demand in emerging markets and figures suggesting the firms were relatively oversold by the market, compared with other sectors.
Nicholas Teo (趙長順), a Macquarie analyst based in Taipei, reiterated a positive view on the thin film transistor-LCD industry and recommended that investors increase their exposure to the sector, the note said.
Teo recommended a 12-month target price of NT$82 for AU Optronics, which has seen share prices drop 4.41 percent this year.
But it was Innolux Display Corp (群創光電) that emerged as Macquarie's top pick among the six, according to the note. Teo offered a target price of NT$206 for Innolux, which saw shares close 19.55 percent lower since the beginning of this year at NT$88.5 yesterday.
The other four panel makers recommended by Macquarie were Chi Mei Optoelectronics Corp (
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San