LCD panel maker AU Optronics Corp (AUO, 友達光電) yesterday posted a first-quarter loss, but expects profitability to improve significantly in upcoming quarters as demand recovers.
Losses narrowed to NT$5.58 billion (US$172.87 million) in the quarter ended March 31, compared with losses of NT$8.24 billion the previous quarter, company data showed.
However, the improvement fell short of market expectations, with HSBC predicting losses of NT$1.5 billion and CIMB forecasting losses of NT$4.9 billion.
“With more offerings of our high-value-added TV and notebook panels, we hope to see profitability improve significantly in the second and third quarters,” AUO president Michael Tsai (蔡國新) told an investors’ teleconference.
AUO chairman and chief executive officer Paul Peng (彭双浪) said visibility had improved, with the company sensing an entirely different market sentiment from last month, adding that the momentum would extend into the second quarter.
“The first quarter is the bottom... We see a mitigation of pricing pressure and prices for certain panels could even start rebounding,” Peng said.
Customer restocking demand ahead of the Labor Day shopping season next month and TV replacement demand ahead of the Olympics in Rio de Janeiro in August are driving forces, he said.
“Supply and demand will move toward parity in the second quarter,” Peng said, adding that AUO expects shipments of TV and PC panels to grow by a mid-single-digit percentage this quarter from last quarter.
Average selling price would climb by a mid-single-digit percentage after falling 9.35 percent sequentially last quarter to US$349 per square meter, while factory utilization is tipped to rise this quarter from last quarter’s 90 percent, the Hsinchu-based company said.
Despite the expected short-term recovery, investors are concerned about a rapid change in the landscape of the global LCD industry following Hon Hai Precision Industry Co’s (鴻海精密) acquisition of Japan’s Sharp Corp.
“To cope with the change in the competitive environment, AUO has to speed up its strategy of focusing more on developing [value-added] products and commercial products,” Tsai said. “We also have to enhance the company’s operational efficiency.”
As South Korean rivals Samsung Electronics Co and LG Display Co are investing heavily in organic LED (OLED) technology with Apple Inc adopting OLED panels for its new iPhones, investors are watching AUO’s progress in developing next-generation OLED technology.
AUO supplies OLED panels for wearable devices and Internet of Things applications.
“We believe OLED panels are only one part of the mobile phone display landscape. We believe there is still ample room for LCD panels,” Tsai said. “To cater to growing demand for high-resolution and low-power-consumption panels, AUO is accelerating capacity expansion of LTPS [Low-temperature polycrystalline silicon] panels in China.”
LTPS features high resolution and low power consumption.
AUO has budgeted between NT$45 billion and NT$50 billion for capital expenditure this year, including investing in an LTPS plant in China. The new plant is to ramp up production in the second half.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”