AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創光電), two of the nation’s leading flat-panel makers, are likely to see their net profits rise thanks to depreciation of the Japanese yen and a subsequent drop in the cost of importing raw materials from Japan, analysts said.
Rising TV panel prices are also expected to continue to boost sales for the two companies this quarter, as TV panels have been their major sales source, accounting for more than 40 percent of their total revenue, analysts said.
The yen hit a low of nearly seven years at one point last week, when it dropped to ¥118 to the US dollar, depreciating about 1.08 percent over the week.
An analyst at Yuanta Financial Holding Co (元大金控) said AUO showed that every 1 percent of depreciation for the yen would result in net profit growth of 0.1 percent for the panel maker.
The yen devalued by about 1.6 percent in the third quarter of the year, during which time AUO reported an increase of net profits by 1 to 2 percent, Yuanta said.
Innolux saw similar gains thanks to the dropping cost of Japanese imports, the financial broker added.
However, Yuanta said that the dropping value of the yen would also give Japanese exporters a boost, increasing competition for Taiwanese firms.
Meanwhile, a study by NPD DisplaySearch showed that exports of Japanese-made panels, mostly medium-sized and small low-temperature polysilicon (LTPS) and oxide panels, have increased as the yen has dropped.
Because Apple Inc exclusively uses LTPS panels for its iPhones, DisplaySearch said that the US company would likely purchase 960 million iPhone 5 panels and 980 million iPhone 6 panels this year to take advantage of the relative price drop.
The procurement would account for 37 percent of the world’s total output of LTPS and oxide panels this year, making Apple the largest user of the technology, DisplaySearch said.
Shares of AUO fell 0.34 percent to NT$14.60 and Innolux closed unchanged at NT$14.95 in Taipei trading on Friday.
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