Affected by the latest industrial slump, the nation’s major liquid-crystal-display (LCD) panel makers saw sharp falls in sales last month, with prospects looking bleak as consumers tighten their belts.
Chi Mei Optoelectronics Corp (奇美電子), Taiwan’s second-largest flat panel maker, said yesterday that sales last month dropped 45.4 percent year-on-year, or 31 percent month-on-month, to NT$20.8 billion (US$634 million) — its lowest since April last year.
On Thursday, AU Optronics Corp (友達光電), the world’s third-largest panel maker, posted its weakest sales in 22 months at NT$27.26 billion last month, citing sagging demand amid the economic slowdown. Sales last month represented a decline of about 48 percent from a year earlier.
Chunghwa Picture Tubes Ltd (中華映管), another local LCD panel maker, also reported that sales last month dipped 53.8 percent to NT$7.52 billion from a year ago.
HannStar Display Corp (瀚宇彩晶), ranked fifth among local manufacturers, posted a 42 percent drop in sales last month to NT$3.16 billion from NT$5.3 billion a year earlier.
In light of the downward spiral, WitsView, a panel industry research arm of DRAMeXchange Technology Inc (集邦科技), said it expected local panel makers’ losses “to widen in the final quarter of this year as a free fall in panel pricing further erodes their profits.”
Prices for mainstream PC panels may fall by another 2 percent to 4 percent in the first half of this month compared with two weeks ago, while those for TV panels may drop 2 percent during the same period, Taipei-based WitsView forecast.
In the July-to-September period, Chi Mei posted record quarterly losses of NT$4.19 billion. AU Optronics was the only local panel maker to eke out profits during the period.
But with the global economy at risk of sliding into recession, analysts said AU Optronics could swing into losses in the fourth quarter.
Citigroup forecast a loss of NT$6 billion for AU Optronics in the October-to-December period, while analysts at SinoPac Securities Corp (永豐金證券) predicted a loss of NT$7 billion.
Some local panel makers are likely to shut down part of their production and start cutting jobs after equipment utilization at some factories recently dropped to a new low of 50 percent, WitsView said.
Local companies may face bigger challenges than their South Korean rivals, which have better cost efficiency and support from their parent company or TV brand business.
The latest downturn will carry into the first half of next year, WitsView said.
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