Chi Mei Optoelectronics Corp (CMO, 奇美電子), the nation’s second-biggest maker of liquid-crystal-display (LCD) panels, said its second-quarter earnings more than quadrupled, but the company planned to cut output this quarter by at least 15 percent to cope with fast declining demand.
The cut in production will be more drastic than bigger rivals AU Optronics Corp (友達光電) and LG Display Co Ltd, which plan to lower their equipment loading rate by 10 percentage points this quarter.
CMO was also conservative about future capacity expansion, president Ho Jau-yang (何昭陽) told investors yesterday.
“The investment for next year will be lower than this year,” Ho said.
CMO planned to spend NT$100 billion on equipment this year.
In the second quarter, net income jumped to NT$13.74 billion (US$448 million), or NT$1.88 per share, from NT$3.39 billion a year earlier, the company said in a statement. Gross margin improved to 22.3 percent last quarter from 15.2 percent.
After a year of profitability, “the golden era is about to end,” Ho said.
“In late June, the weakening global economy dealt a big blow to consumer confidence and consumer purchasing power,” Ho said. “We had expected the third quarter to be a traditionally high season, but now it may be the opposite.”
Early this year, most LCD panel makers and their customers had expected a shortage in the second half of the year.
With the slowdown, customers have hesitated to place more orders as inventories have been above normal levels, Ho said.
CMO did not rule out the possibility of cutting production more than 15 percent, Ho said.
The average price for CMO’s computer and TV LCD panels may decline as much as 5 percent in the third quarter from US$164 per unit last quarter, Ho said. The price dropped 7.2 percent last quarter.
Ho hoped that panel prices would hold steady next month after major panel suppliers cut production in a bid to ease oversupply.
“We have begun seeing a slight recovery now. July should be the bottom,” Ho said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to