AU Optronics Corp (AUO, 友達光電) yesterday posted a third straight quarterly net profit as it shipped more better-margin, high-resolution television panels, helping the company break two years of losses.
However, net profit declined 57 percent to NT$1.08 billion (US$35.4 million) last quarter from NT$2.51 billion in the third quarter last year, because of declining average selling prices.
Last quarter’s results reversed the company’s fortunes from a net loss of NT$12.95 billion in the final quarter of 2012.
Last year as a whole, the nation’s No. 2 LCD panel maker made NT$4.25 billion in net profit, compared with a net loss of NT$56.04 billion in 2012.
There are worries that this year could be challenging for AUO, considering increased panel production by Chinese rivals at their 8.5-generation (8.5G) plants that are expected to come online later this year.
According to market researcher NPD DisplaySearch’s tallies, eight 8.5G plants, including those of LG Display Co, Samsung Electronics Co and BOE Technology Group Co (京東方), are expected to become operational by the end of this year.
Innolux Corp (群創光電), the nation’s biggest LCD panel maker, yesterday told employees that this would be another challenging year, as there would be more competitors entering the industry.
“We will create [product and technology] differentiations to boost the company’s competitiveness,” Innolux president and general manager Wang Jyh-chau (王志超) said in a video clip.
Earlier this month, AUO said it would scrap a plan to build an 8.5G factory in China and instead would construct a 6G plant at the same site, using advanced technology to make panels with higher resolution for smartphones and tablets.
The company plans to spend NT$50 billion to build the 6G plant and to start operation in early 2016, targeting a monthly capacity of 30,000 sheets.
That will help push up AUO’s capital spending for this year to about NT$30 billion from last year’s NT$25 billion, according to the company.
“We will continue to differentiate our products and continue to invest in technological research,” AUO president Paul Peng (彭双浪) told investors.
“For AUO, non-8.5G factories will be our weapons to create product differentiation,” he added.
This quarter, AUO expects shipments of TV and PC panels to drop by between a high-single digit and a low-teen percentage, from 30.2 million units last quarter, chief financial executive Andy Yang (楊本豫) said, citing slow seasonal demand.
Average selling prices for PC and TV panels are expected to remain flat, or to drop slightly this quarter from last quarter’s US$551 per square meter, after a 10 percent quarterly decline from the previous quarter’s US$606.
TV and PC panels are the company’s biggest revenue source, accounting for 60 percent of AUO’s revenue last quarter, while those used in small and medium-sized panels shrank more than 10 percent sequentially from 41.2 million units.
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