AU Optronics Corp (AUO, 友達光電) yesterday expressed optimism about prospects next quarter, as resilient demand for computers and televisions in major markets like US and China helps offset a stagnant European market.
The company also said it had no plan to raise wages for its Chinese workers, following news that Foxconn Technology Group (富士康) is increasing wages for its 20,000 workers in southern China.
The nation’s No. 2 LCD panel maker said it expected to reach its target of shipments growing 10 percent this quarter from last quarter’s 27.22 million units, dismissing speculation that customers were cutting orders as the European debt crisis weighed on demand.
Company vice chairman Chen Hsuan-bin (陳炫彬) said he was “optimistic [about the second quarter] and even more about the third quarter,” adding that “market demand is still there.”
Demand would come mainly from TVs, PCs and consumer electronics such as mobile phones in the seasonally strong third quarter, Chen told reporters at the annual flat-panel display and photonics trade fair in Taipei.
That would help keep AU Optronics’ factories fully loaded again in the third quarter, he said.
“Panel supply will become tight, especially for high-end and large-size TV panels, such as 40-inch, 50-inch [LCD] panels and LED panels because of limited new next-generation capacities. Some new capacities will not come online until next year, or the year after,” Chen said.
Commenting on the mounting debt crisis in Greece, Spain and Portugal, Chen said the adverse impact from sluggish demand in Europe would be offset by strong demand in other regions like the US, China and South Asia.
“Brand companies are building inventory slowly because of unstable exchange rates [euro versus the greenback], but end demand has not disappeared. That’s the point,” said Paul Peng (彭雙浪), a vice president at AU Optronics.
AU Optronics said it had no plans of following Hon Hai Precision Industry Co (鴻海精密), parent of Foxconn, in raising wages in China.
Hon Hai, the world’s biggest electronics manufacturing service provider which makes phones and PCs for Apple Inc, Dell and HP, announced salary increases for its Chinese workers twice within a week following a spate of suicides and to alleviate customer concerns about working conditions at its Chinese factories.
“We don’t have to follow suit as our wages are already reasonable,” Chen said, adding that the trend now is to hire Chinese workers with the offer of higher pay.
He said he didn’t know yet what the impact of high pay would be on the cost of operations.
AU Optronics declined to reveal how much it pays workers, but said it was higher than the minimum wage set by the Chinese government.
In China, the company runs flat-panel plants in Suzhou and Songjiang, Jiangsu Province, and in Xiamen, Fujian Province.
The three-day trade fair will continue running at the Taipei World Trade Center and Taipei International Convention Center until tomorrow.
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