AU Optronics Corp (AUO, 友達光電) yesterday said the first quarter of this year was its best first quarter in the past nine years as persistent inventory buildup demand for TV panels pushed prices higher.
The LCD panel maker’s net profit expanded about 5.7 percent to NT$9.48 billion (US$314.4 million), compared with NT$8.97 billion in the fourth quarter of last year, the company’s financial statement showed.
In the first quarter of last year, the company lost NT$5.48 billion.
Average selling prices for the company’s products rose 2 percent in the first quarter to US$421 per square meter, up from US$413 per square meter in the fourth quarter of last year.
That represents an annual jump of 20.63 percent.
“TV vendors continued to replenish inventory in the first quarter. Robust demand has caused a supply crunch,” AUO chairman and chief executive officer Paul Peng (彭雙浪) told investors.
“The robust demand is to extend into the second quarter. AUO expects its equipment loading rate to remain at a high gear, or to be almost fully loaded,” he said.
“This will be the longest boom period in the LCD industry’s history. We expect the prosperity to be in place for some time,” he said.
The company said it expects demand growth to outpace supply by about 2 percent this year.
However, it is keeping its capital spending for this year at NT$55 billion, as planned at end of last year.
AUO expects its shipments of PC and TV panels this quarter to shrink by a low-single-digit percentage by unit as it is to ship more large-size and high-end TV panels, such as 65-inch TV panels and 55-inch ultra-high-definition 4K TV panels, which will consume more capacity.
“As TV sets become slimmer, the uptake of 65-inch and 70-inch TVs is improving,” AUO president Michael Tsai (蔡國新) said. “Clients are also asking for more supply of such panels.”
Prices for TV panels are expected to rise by a low-single digit percentage this quarter from last quarter, AUO said.
However, exchange rates might have a greater impact on the company’s business in the first half of the year, Peng said.
A stronger New Taiwan dollar would weaken AUO’s price competitiveness, he said.
Against the US dollar, the NT dollar appreciated 5.6 percent in the first quarter of the year, faster than South Korean won’s 4.1 percent, while Chinese yuan fell 5.3 percent, he said.
AUO also said it has made significant progress this year in expanding its client base for OLED panels.
Monthly shipments of OLED panels for wearable devices, mostly smart watches, are expected to reach 1 million units in the second half of the year, the company said.
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