LCD panel maker AU Optronics Corp (AUO, 友達光電) yesterday posted its strongest quarterly profit in six years as panel prices rose on strong demand for large and high-resolution TVs during the holiday season.
AUO’s net profit soared 83 percent to NT$8.97 billion (US$290.6 million) in the fourth quarter of last year, compared with NT$4.62 billion in the third quarter, its highest level since the second quarter of 2010.
Its average selling price jumped about 11 percent to US$413 per square meter, from US$372 in the previous quarter.
MARGIN INCREASE
Gross margin improved from 13.1 percent to 18.8 percent on the back of the high demand for ultra-high-definition 4K, curved and 50-inch panels.
“Last year was a dramatic year. Demand rebounded sharply in the second quarter, causing a supply shortage,” AUO chairman Paul Peng (彭双浪) told investors in a teleconference.
“AUO followed the industry’s recovery, with profitability improving each quarter,” he said.
This year will be positive for the LCD industry, because global capacity is forecast to grow by only 3 percent annually, as Samsung Electronics Co plans to shut down production lines, while demand is expected to expand at a faster annual pace of 5 percent, AUO said.
“Demand is growing steadily, especially for large TVs. We do not foresee any major negative factors affecting the industry,” Peng said. “LCD panel’s supply-demand situation should be stable this year.”
AUO aims to improve profitability quarter by quarter, he added.
EXPANSION
In a bid to satisfy client demand, AUO plans to increase its capital expenditure by about 19 percent to NT$55 billion, compared with NT$46.2 billion last year, it said.
It plans to invest in a new 6G factory in China to produce high-resolution panels for mobile devices and expand the capacity of an 8.5G plant in Taiwan, it added.
Shipments of TV and PC panels are forecast to fall by a mid-single-digit percentage this quarter, while prices are expected to climb by a low-single-digit percentage, AUO said, adding that equipment loading would remain high from last quarter in the mid-90 percent range.
“TV sales in the world’s major markets — including North America, Europe and China — and emerging countries in Asia, such as India, saw solid growth during the year-end holiday season,” AUO president Michael Tsai (蔡國新) said. “We expect the growth momentum to carry into the first quarter, as TV replacement demand continues.”
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