Chi Mei Optoelectronics Corp (奇美電子), Taiwan’s second-largest flat panel supplier, yesterday said quarterly losses had slowed significantly as the nascent recovery partly offset price declines. It said it expected the revival to gather momentum in the second and third quarters, driven largely by increasing demand from the television sector.
In the first quarter, Chi Mei’s losses narrowed to NT$19.57 billion (US$579 million), compared with losses of NT$31.13 billion in the fourth quarter of last year, a record high quarterly loss for the company as the economic recession took its toll on demand for almost all electronic gadgets, a company statement said.
The Tainan-based panel maker earned NT$15.29 billion in the first quarter of last year after the average selling price for TV and PC panels plunged some 47 percent year-on-year to average US$94 per unit as demand dwindled, the statement showed.
But, Chi Mei said it had witnessed a recovery recently as price and demand started to bounce back from late in the first quarter, it said.
“We have been receiving a lot of orders recently. Demand has exceeded what we can supply,” company president Wang Jyh-chau (王志超) told investors.
The company said orders received would occupy most of its equipment through June.
“Customer demand looks very strong and the increase [in orders] is across-the-board with TV demand outpacing other sectors,” Wang said.
SHIPMENTS
The recovery may help the company’s PC and TV panel shipments grow by 25 percent to 30 percent this quarter, from the 13.26 million units shipped in the first quarter, Chi Mei said. Reflecting on equipment usage, loading rate may rise to between 80 percent and 85 percent in the current quarter from between 55 percent and 60 percent in the last quarter, it said.
Prices may bounce back by 5 percent to 15 percent quarter-on-quarter for PC panels and 5 percent to 10 percent for panels used in TVs with screens smaller than 40 inches, Chi Mei said.
“We are also optimistic about the third quarter, which should be a better period than the second quarter for the LCD panel industry as a whole,” Wang said. “TV recovery especially in China and North American may outpace other sectors.”
Jeff Pu (蒲得宇), a liquid-crystal-display (LCD) panel industry analyst with Yuanta Securities (元大證券), however, said Wang’s optimism about the industry could send a negative message about Chi Mei’s operations.
“Chi Mei’s second-quarter forecast is weaker than that made by rival AU Optronics Corp (友達光電), which indicates that Chi Mei may not benefit from the recovery as much as its rival does,” Pu said.
UTILIZATION
AU Optronics forecast that TV and PC shipments would expand by 50 percent quarter-on-quarter and equipment utilization may approach 100 percent. Pu retained a “sell” rating on Chi Mei, while upgrading AU Optronics’ rating to “buy” from “hold” last week.
In restructuring efforts launched in recent months to improve profitability, Chi Mei said it would not carefully control capital spending and would not join competitors in a capacity expansion race.
“We are not in a hurry to resume the construction of a 8.5-G plant,” Wang said.
“The move could put Chi Mei at a disadvantage in seizing business opportunities after demand for TVs with screens bigger than 40 inches grows next year,” Pu said.
A 8.5-G plant is considered an optimal factory to produce TV screens bigger than 50 inches in terms of cost efficiency, but would cost panel makers more than NT$100 billion to build.
Chi Mei yesterday raised its capital spending for this year to NT$35 billion from the original NT$30 billion. Last year, it spent NT$104.5 billion on new equipment.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS