AU Optronics Corp (友達光電), the second-largest maker of flat-panel displays for computers, said it will lose money in the first three quarters after prices of the screens slumped amid oversupply and slowing sales of PCs.
The merged unit of Acer Display Technology Inc and Unipac Opto-electronics Corp (聯友光電) expects to return to profit in the fourth quarter as the PC industry recovers, said Chairman Lee Kun-yao (李焜耀), who is visiting London with Minister of Finance Yen Ching-chang (顏慶章) to attract investments from overseas investors.
``The loss is not surprising,'' said Steven Chen, who manages about NT$1 billion (US$29.1 million) in Taiwan stocks at Union Securities Investment Trust Corp (聯邦投信). ``In the longer term, we're positive on the company as there will definitely be demand.'' Production at Taiwan's flat-panel display makers more than doubled last year after at least seven new entrants began operations in the past two years. Meanwhile, flat-panel prices halved in the past year, according to Lee.
With no new company entering the business in the last six months and demand for larger screens, such as 16-inch and 17-inch displays, rising, AU Optronics expects prices to rebound this year, Lee said in an interview.
``The worst time is over,'' he said.
Acer Display and Unipac will complete their merger by September 1, after which Acer Inc (宏電), the parent company of Acer Display, and United Microelectronics Corp (UMC, 聯電), which controls Unipac, will each own about a fifth of AU Optronics.
The merger will make AU Optronics the second-largest maker of liquid crystal displays by volume. The company, which will supply to computer makers such as International Business Machines Corp, Dell Computer Corp and Sony Corp, plans to ship seven million small displays -- for camcorder and cell phones -- and five million large panels for notebooks and desktops this year.
The company also plans to set up a production plant in China for flat panel components to help lower costs, Lee said without elaborating.
Acer Display's shares fell NT$1.30, or 3.8 percent, to NT$32.60. Yesterday the stock fell 43 percent since its last September debut on the Taiwan Stock Exchange, compared with a 36 percent drop in the benchmark TAIEX over the same period.
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