AUO, Chimei shares fall 7%
Shares of AU Optronics Corp (AUO, 友達光電) and Chimei Innolux Corp (奇美電子), two of Taiwan’s leading flat-panel makers, came under further pressure yesterday because of falling display prices, dealers said.
AUO fell 7 percent, the maximum daily decline, to NT$13.25, and Chimei Innolux also dropped by the daily down-limit to NT$13.05.
According to DisplaySearch, a market information advisory firm, flat panel prices early this month fell US$2 to US$7, with 46-inch displays dropping as much as US$7 to US$307 per unit, and 40 inch to 42 inch panels falling US$6 to US$231.
Dealers said weakening product prices early this month have defied market expectations that prices for flat panel would stage a rebound from last month.
Many investors fear that AUO and Chimei could incur further losses in the third quarter of this year and rushed to further cut their holdings in the two stocks, dealers said.
Elpida considers production cut
Elpida Memory Inc may cut production if a slump in the dynamic random access memory (DRAM) market continues, Yoshitaka Kinoshita, executive officer at the Japanese company, said at a briefing yesterday.
Kinoshita’s remark came after Taiwan’s computer memory-chip packager, Powertech Technology Inc (力成科技), said last month that inventory adjustment would continue for a while, as slowing PC sales have driven down memory-chip demand and significantly depressed chip prices in the past two months.
“Some of our DRAM customers told us that they have decided to cut output by up to 20 percent in the third quarter, which will also impact on our sales in the quarter,” Powertech chairman Tsai Tu-king (蔡篤恭) told investors on July 28 in Taipei, without naming the customers.
Elpida is one of Powertech’s customers.
Oil purchases decline 27%
Taiwan purchased less fuel last month after an accident at a Formosa Plastics Group (FPG, 台塑集團) plant reduced processing capacity.
Shipments declined 27 percent from a year earlier to 27.2 million barrels last month, the Ministry of Finance said yesterday. The nation’s oil bill last month climbed 10 percent to US$3.02 billion, the ministry said in a statement.
FPG halted some plants at its Mailiao (麥寮) complex in Yunlin County after a fire on May 12. Its refining unit Formosa Petrochemical Corp (台塑) has shut its No. 1 naphtha cracker plant.
Meanwhile, FPG agreed yesterday to give priority to domestic rather than foreign workers when hiring staff to work on safety improvements at its fire-plagued Mailiao complex.
FPG executives made the decision following a meeting with Council of Labor Affairs officials earlier in the day.
The industrial conglomerate had originally hoped to bring in 2,500 workers from abroad to carry out a pipeline renewal project, but changed its plan after being urged to hire local workers instead.
NT dollar closes flat
The New Taiwan dollar closed flat against the US dollar yesterday, remaining unchanged at NT$29.025 after the central bank intervened to help the greenback recoup early losses, dealers said.
Central bank Governor Perng Fai-nan (彭淮南) stayed in the trading room of the bank during most of the foreign exchange session, watching closely how the local financial market would react to the S&P downgrade on the US’ credit rating, dealers said.
Turnover totaled US$1.323 billion during the trading session.