Innolux Corp (群創), the nation’s top LCD-panel maker, is considering boosting capital investment to expand capacity and ease supply constraints.
An unexpected pickup in demand for notebook computers left panels in short supply in the first quarter and Innolux expects the shortfall to continue into the next quarter for almost all its products.
“This year, the supply and demand situation has greatly surpassed our expectations,” Innolux president Wang Jyh-chau (王志超) told a media briefing. “Supply is far below demand and this constraint is being felt across the board and could extend into the fourth quarter.”
Photo: Chen Mei-ying, Taipei Times
“As such, we are thinking of increasing our capital expenditures at an appropriate time,” Wang said, adding that Innolux is fully utilizing its equipment and has cleared its stockpiles.
The company has budgeted NT$20 billion (US$670 million) for new facilities and equipment this year, most of which is aimed at enhancing productivity and upgrading technologies. However, it is currently only able to process 80 percent of customer’s orders for laptop panels, Wang said.
In the TV segment, “demand usually drops in September, but this year, we are seeing strong demand continuing into October,” with the supply drought afflicting a wide range of slim television panels, including the mainstream 39-inch and 24-inch ones, Wang said.
Local rival AU Optronics Corp (AUO, 友達光電) yesterday said that resilient demand for its products will help keep the company’s equipment loading rate at 100 percent this quarter and the next, which it expects will result in a gradual increase in revenue and profits.
“The third quarter is the beginning of the seasonal high period and is usually the peak of the season as clients start building [inventories] in preparation of China’s October shopping season and year-end shopping sprees in Europe and the US,” AUO chief executive officer Paul Peng (彭双浪) told reporters on the sidelines of International Touch Panel and Optical Film Exhibition in Taipei.
Peng said that AUO was unable to fully satisfy its customers’ demand for TV and smartphone panels.
At the exhibition, the company showcased a series of 42-inch to 85-inch curved TV panels in a bid to seize more business opportunities during the year-end shopping season.
AUO said it has already started shipping those panels to customers and expects the uptake of such panels to grow faster than that of ultra-high-definition, or 4K, televisions, vice president Michael Tsai (蔡國新) said.
The prices of curved 4K LCD TV panels are between 1.3 and 1.5 times higher than those of average high-definition LCD TV panels, Tsai said.
He said about 50 to 70 percent of 4K TV panels shipped to Europe by AUO’s clients were curved.
Innolux did not display any curved panels at the industry show, but said that it has shipped some to a client, although it declined to elaborate.
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