Innolux Corp (群創), an LCD panel manufacturing arm of Hon Hai Precision Industry Co (鴻海精密), yesterday posted deeper quarterly losses for last quarter as muted seasonal improvement continued to drag on TV panel shipments and prices.
Net losses widened from NT$2.97 billion (US$97.66 million) in the second quarter to NT$3.89 billion in the July-to-September period, reversing net profit of NT$1.91 billion in the third quarter last year, company data showed.
Operating losses last quarter rose to NT$4.85 billion from losses of NT$3.34 billion in the prior quarter, the company said in a statement.
Operating margin fell to minus-7.7 percent last quarter from minus-5.3 percent a quarter earlier.
Non-operating gains of NT$1.4 billion on Innolux’s books last quarter helped prevent the losses from dipping further, it said, adding that non-operating income was NT$576 million in the second quarter.
Average selling prices last quarter slid 2.79 percent to US$279 per square meter from US$287 in the April-to-June period, while shipments dropped 2.9 percent sequentially, it said.
To cope with an industry slump, Innolux said it is mulling a slight cut to capital spending from an estimated NT$28.8 billion for the whole of this year.
The company has spent NT$20.3 billion on new facilities and equipment this year.
Innolux said it expects prices for large TV panels to stabilize this quarter, as clients are replenishing inventory to cope with demand during year-end shopping.
TV, PC PANELS
The company forecast that prices for TV and PC panels would be flat this quarter from a quarter earlier.
Shipments for TV and PC panels are to hold steady this quarter as well, it said.
Innolux gave a more positive outlook for this quarter than local rival AU Optronics Corp (友達光電), which forecast that its shipments of TV and PC panels would plunge 15 percent sequentially, with selling prices to drop by a single-digit percentage, citing pressure from a supply glut in China.
Innolux was upbeat about demand for small and medium-sized panels for mobile phones, saying that supply constraints are driving up prices.
Overall, it expects small and medium-sized panel prices to climb about 5 percent sequentially this quarter, but shipments might drop about 5 percent quarter-on-quarter, the company said.
Commenting on its TV set assembly business, Innolux said that it has reached 70 percent of its shipment goal of 2.5 million units for this year.
The imposition of 15 percent tariffs on TVs from China curtailed demand, it said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a