AU Optronics Corp (AUO, 友達光電), the nation’s second-largest LCD panel maker, expects the downward pressure on prices of LCD TV panels to ease in the second half of this year, thanks to improving inventories and rising demand ahead of the peak season.
Since the beginning of this year, prices for TV panels, such as 32-inch and 40-inch screens, have dropped more than 20 percent, as TV vendors continued to scale down orders to level off their excessive stockpiles, the company said.
“It is unlikely that panel prices will hover at below-cost levels for a long period. The market will balance out eventually,” AUO chairman Paul Peng (彭双浪) told a media briefing after the company’s annual shareholders’ meeting in Taichung on Friday last week.
Photo: Chen Mei-ying, Taipei Times
As the LCD TV market is to enter its peak season in the third and fourth quarters, price declines should slow and the price of certain types of panels might even pick up, Peng said.
The ongoing FIFA World Cup would help stimulate TV sales, while most TV vendors are close to reducing their panel inventories to healthy levels, he said.
Those favorable factors would help boost AUO’s business in the second half of the year, he added.
Commenting on the competition from Chinese peers, Peng said that AUO has been developing panels with added value, such as those used in cars and the commercial sector, which would enable the company to better manage downturns and price competition.
Revenue from panels used in cars is predicted to grow by a double-digit percentage this year, as automakers are equipping new car models with bigger screens of 12 to 13 inches, Peng said.
More than half of the company’s revenue is generated by value-added panels, he said.
The company’s healthy financial status would give AUO more leeway to cope with escalating competition, Peng said.
AUO last year saw its net profit grow to a 10-year high of NT$32.36 billion (US$1.08 billion). The company reduced its net debt ratio to 4.8 percent last quarter, from 18.5 percent a year earlier, the company’s financial statement showed. It has accumulated NT$97.12 billion in cash and cash equivalents.
As for products, AUO said it would ship its first mini-LED panels — which are used in premium monitors for gaming PCs — in the second half of the year.
After that, it is scheduled to ship mini-LED panels used in notebook computers, the company said, adding that it is also developing mini-LED panels for mobile phones and virtual-reality devices.
Mini-LED panels have a similar brightness, color contrast and response time to OLED panels, but at more affordable prices.
AUO shareholders on Friday approved the distribution of a cash dividend of NT$1.5 per common share, which represented a payout ratio of 44.64 percent, based on earnings per share of NT$3.36 last year.
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