Chimei Innolux Corp (奇美電子), the world’s third-largest LCD panel maker, yesterday posted its smallest losses in one-and-a-half years thanks to increases in the shipment of higher-margin TV panels and better factory usage.
The quarterly losses, the eighth quarter in a row, improved to NT$9.57 billion (US$319 million), including a new US$10 million payment to settle a price-fixing lawsuit with a client, from losses of NT$12.77 billion in the first quarter and NT$13.01 billion losses in the second quarter of last year.
Gross margin improved to minus 1.7 percent from minus-6.5 percent in the previous quarter and minus-5.4 percent a year ago. Average sales prices for PC and TV panels rose 1.16 percent to US$87 per unit last quarter from US$86 in the first quarter.
This quarter, Chimei would improve further from last quarter and outperform the overall market, which was expected to be flat, chairman Tuan Hsing-chien (段行建) said.
Strong end demand for tablets in emerging markets, such as China, would become a major growth driver, in addition to sales of the company’s new TV panels such as 58-inch and 29-inch TV displays, Chimei said. The “white-label” tablet market totals 60 million units a year, according to the company.
“Based on our observations, tablet demand in emerging markets showed a sharp uptrend recently,” said Jeff Hsu (許庭禎), a vice president of Chimei. “This segment will contribute a lot to Chimei’s growth in the third quarter.”
The firm said in June that gross margin for mobile devices has swung into positive territory. Small and medium LCD panels and touch screens for mobile devices such as smartphones and tablets accounted for 19 percent of the company’s total revenue of NT$112.52 billion last quarter.
Notebook computer panels would be another factor boosting the company’s operations. The company’s improvement would reflect its equipment loading rate.
“I believe there will be several percentage points improvement in the third quarter,” Tuan said.
Yesterday, Chimei posted 8-percent monthly sales growth to NT$39.80 billion from NT$36.83 billion in June. Shipments of small and medium-sized panels climbed 12.6 percent to 33.99 million units last month from a month ago, while PC and TV panel shipments increased 5.2 percent sequentially to 12.56 million units.
Last quarter, 30-inch and 40-inch TV panels contributed a bigger share (33 percent) of the company’s total revenue, compared with 28 percent a quarter ago and 30 percent a year ago.