AU Optronics Co (友達光電), the world’s No. 3 liquid-crystal-display (LCD) panel maker, said yesterday computer and TV panel shipments could grow at a faster-than-expected pace this quarter on swift rebound and lead to supply constraint and further price increases through the third quarter.
AU Optronics vice chairman Chen Hsuen-bin (陳炫彬) said the company expects recovery to have begun as early as toward the end of the first quarter and that cooperation between local and Chinese TV makers had helped the LCD industry recover faster than other sectors.
“We have no reason to be pessimistic about this year. Billing is quite good, but we are nervous about component supply,” AU Optronics president Chen Lai-juh (陳來助) said, adding that the situation should remain the same through the third quarter.
“We have a pretty clear picture [about this year’s business environment],” Chen said.
Helped by a faster-than-expected recovery, TV and PC panel shipments could slightly outpace the 50-percent quarterly growth forecast by the company in April, he said.
A spike in recovery has already given rise to supply constraints and tight supply of glass substrates for TV panels, in particular, could exacerbate the shortage next quarter, Chen said.
“We are unable to fully meet customer demand. We can only supply 70 percent of their orders,” Chen said.
Better-than-expected TV sales in the US, strong demand from Chinese markets after Beijing launched massive stimulus packages including subsidies of TV purchases first in rural areas and now in big cities, were the main reasons behind the optimism, he said.
In addition, there are expectations of a high PC replacement demand in the second half following Microsoft Corp’s release of its new Windows 7 operating system and the emergence of all-in-one PCs as well as ultra-thin notebooks, he said.
As a result, Chen said “we expect panel prices to rise moderately in the near future.”
Local rival Chi Mei Optoelectronics Co (奇美電子) also expected a shortage to lead to “a significant price increase” this month from last month and in the third quarter, company spokesman Kuo Chen-lung (郭振隆) said.
Kuo said increases in panel purchases from Chinese TV makers and slower output compounded by insufficient supply of almost all key components were behind the panel supply crunch.
Chinese TV makers said they would double the purchase of LCD panels from Taiwanese makers to US$4.4 billion from US$2.2 billion after a trip to Taiwan last week.
China accounted for more than 30 percent of Chi Mei’s total TV panel revenue, making China the company’s biggest panel export destination, Kuo said.
Chi Mei said factory utilization rose to nearly 85 percent while AU Optronics’ was almost fully used, in line with its projections in April.
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