AU Optronics Corp (
But the result beat the estimates of most analysts, who expected the company's losses to widen.
"We're feeling much more comfortable now. We believe the trough is over. Looking ahead, our performance will have room to improve further," company chairman Lee Kun-yao (李焜耀) told an investor's conference yesterday.
To pave the way for an industry upswing, the firm said it will resume the construction of an advanced 7.5-generation plant in central Taiwan, which will make bigger-sized, 42-inch and 47-inch LCD screens for televisions.
The current mainstay fifth-generation (5G) fabs used by local LCD panel manufacturers mainly supply 17-inch and 19-inch screens for computer monitors.
The company plans to invest NT$36 billion in the new factory through a bank loan later this year and the issuance of American Depositary Receipts, scheduled for next year. The plant is scheduled to start mass production by the end of next year.
During the current quarter, panel prices will hold steady, with sales also increasing, chief financial officer Max Cheng (
Additionally, there is room for price hikes on computer monitors on strong demand, another company official said.
Shipments of LCD panels used in computers and TVs will grow by 10 percent during the April to June period, from 6.04 million units in the first quarter, Cheng said.
The constant plunge in panel prices last quarter seriously eroded the company's profitability, Cheng said.
In the first three months, the company's losses narrowed slightly to NT$2.1 billion (US$67 million), or NT$0.43 (US$0.14) per share, from NT$2.23 billion in the final quarter of last year, according to a company statement. Revenue edged down to NT$38.84 billion quarter on quarter.
Prices has dropped over 15 percent at a quarterly rate, Cheng said, adding that the decline for screens used in slim-screen TVs was much faster.
The quarterly loss, however, was better than that of bigger rival LG.Philips LCD Co's US$78 million during the same period. The world's second-largest LCD panel maker reported its first loss since the first quarter of 2003 earlier this month.
"[AU Optronics'] result is far better than my expectation," said Wang Wanli (
Wang had projected AU Optronics would lose NT$2.7 billion.
But, the company is still several steps away from returning to profitability, Wang said.
"I'm not as optimistic [as some investors]," he said.
"Demand and pricing looks okay in the current quarter. Cost-down ability, however, will be the key as a 10 percent savings boosted the company's bottom line last quarter" he said, adding that he expects the firm to break even next quarter at the earliest.
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