AU Optronics Corp (
The company also said it would more than double its capital spending this year.
With demand for TV screens bigger than 46 inches expected to grow over the next two years, AU Optronics will create a new 8.5-generation (8.5G) production line at a 7.5G factory in Taichung, general manager Chen Lai-juh (
AU Optronics plans to spend up to NT$140 billion (US$4.34 billion) on new facilities and equipment this year, with 28 percent of that amount allocated for the 8.5G production line. Revised spending was NT$65 billion last year, Chen said.
The company will build the new 8.5G plant by the end of the year, he said.
"Customers have not changed their feelings about this year ... We are still upbeat about 2008 and believe it will be a better year than 2007," Chen said.
Shares of AU Optronics were unchanged at NT$54.3 yesterday, compared with a 0.43-percent loss on the TAIEX.
AU Optronics is scheduled to launch the new production line with a monthly output of 40,000 sheets in the second half of next year, the firm said.
"This is a necessary move by AU Optronics to catch up with rivals' capacity expansion and secure its position in the industry," said Eric Lin (
In the fourth quarter of last year, net profits spiked to NT$33.1 billion, or NT$4.22 a share, from NT$1.65 billion, or NT$0.99 a share, in the same period of 2006. Revenues jumped 64 percent year-on-year to NT$155.5 billion with 47 percent coming from TV screens.
"The strong demand in end-user markets has resulted in a steady blended-panel average selling price and we have moved to a more competitive product mix," AU Optronics' chief financial officer Max Cheng (
An 18 percent improvement in average selling prices for PC and TV liquid-crystal-display (LCD) panels helped boost the gross margin to 27 percent last quarter from 8.1 percent a year ago and 23 percent in the third quarter of last year, the company said.
Looking ahead, "demand in the first quarter will be quite good. Inventory will be healthy and the snowstorm in China will bring a parity between supply and demand," AU Optronics vice president Paul Peng (
Echoing the outlook of its larger competitor LG.Philips LCD Co for the first quarter, AU Optronics' comments added to a sector-wide consensus that demand would improve, Lin said.
"AU Optronics' low inventory eases concerns about excessive stockpiles this quarter," he said.
Shipments of computer and TV panels may drop by 10 percent from the previous quarter's 23.2 million units, Cheng said, as China's most severe winter weather in five decades has paralyzed transportation there.
The price of computer panels may slide by 5 percent quarter-on-quarter, while the price of TV panels may inch up by 2 percent to 3 percent quarter-on-quarter, he said.
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