Sat, Jan 09, 2016 - Page 13 News List

AUO Japanese polysilicon closure reduces earnings

By Lisa Wang  /  Staff reporter

AU Optronics Corp (AUO, 友達光電) yesterday said the closure of its unprofitable polysilicon manufacturing production in Japan would cut NT$6.75 billion (US$201 million) from last quarter’s bottom line, exacerbating the LCD panelmaker’s already poor profitability.

AUO, the world’s No. 4 LCD panelmaker, said the board of its fully owned solar subsidiary M Setek Co had decided to shut down its polysilicon production line due to stiff market competition and constant oversupply, which would result in an asset impairment following the closure.

“The polysilicon manufacturing line is no longer competitive, so M Setek’s board decided to halt production,” AUO said in a statement.

Ploysilicon is one of the major raw materials used in the production of solar wafers.

The asset impairment is to reduce AUO’s earnings by NT$0.7 per share, the company said in a filing with the Taiwan Stock Exchange.

Without factoring in the erosion, AUO was already expected to swing into a loss of NT$30 million in the final quarter of last year due to weak Chinese economy and sluggish demand in the slow season, Capital Investment Management Co (群益投顧) said.

Market researcher IHS Technology warned in November that Taiwanese LCD panelmakers would suffer losses in the final quarter of last year as prices were to plunge at the steepest rate since a slump in 2008.

AUO said in a separate company statement released yesterday that revenue for last month slid 8.9 percent to NT$25.96 billion from NT$28.49 billion in November, marking the lowest monthly figure in 18 months.

The company said shipments of PC and TV panels fell 9.7 percent sequentially last month.

Revenue for the whole of last year plunged 23 percent to NT$360.55 billion from NT$408.18 billion in 2014, according to the company’s statement.

Last year’s results were slightly better than the NT$356.89 billion forecast by Capital Investment.

Meanwhile, Innolux Corp (群創), the world’s third-largest LCD panelmaker, said revenue rose 3.8 percent to NT$26.42 billion last moth, compared with NT$25.46 billion a month ago.

Shipments of PC and TV panels increased 5.8 percent last month from November, according to a company statement.

For the whole of last year, revenue slid 15.1 percent to NT$364.1 billion from NT$428.7 billion in 2014 after shipments of its major revenue source, PC and TV panels, shrank 13 percent annually, Innolux said.

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