Shares of AU Optronics Corp (AUO, 友達光電), the nation’s top liquid-crystal-display (LCD) panel maker, and local peers soared yesterday after US glass maker Corning Inc said shipments could fall as a result of suspension of production at one of its Japanese facilities.
Tightening supply of mother glass could limit panel makers’ capacity expansion and lead to a longer uptick in panel prices.
The company revised down its shipment forecast on Tuesday, saying shipments could decrease by between 5 percent and 10 percent this quarter from last quarter, after a strong earthquake disrupted glass production at a plant in Shizuoka, Japan, on Monday. The company expects shipments will be flat or rise slightly amid strong demand.
“This would provide a boon to existing panel makers as the glass shortage could continue to slow panel suppliers’ output increases in September and ease concerns that a glut could return in the fourth quarter after panel makers resume capacity expansion plans on fragile recovery,” said Annabella Hsu (徐美雯), a LCD panel analyst at International Data Corp (IDC).
Slower capacity increase could help drive panel prices up US$2 or US$3 per unit on average next month from this month, reversing a possible decline, Hsu said.
IDC said it expects AU Optronics and its local rival, Chi Mei Optoelectronics Corp (奇美電子), will swing back into profitability this quarter as prices have rebounded to cost level.
On July 23, AU Optronics said the glass shortage should taper off next month after supply constraints began in May. AU Optronics said the short supply of glass could cut its production by between 5 percent and 10 percent this quarter.
AU Optronics shares yesterday rose 5.61 percent to NT$34.85, out-performing the benchmark TAIEX index, which dropped 0.15 percent. Shares of Chi Mei rallied 2.54 percent to NT$18.15, while No. 3 panel maker Chunghwa Picture Tubes Ltd (中華映管) rose 0.74 perent to NT$4.07.
In related news, Hsu said panel makers could win orders from Sharp, which may be unable to source enough glass to produce TV panels as suspended operations at Corning primarily produced large-size glass for TV panels.
Citigroup analyst Andrew Lu (陸行之) said in a report released yesterday that the global LCD substrate glass shortage could extend into the final quarter, resulting in firm panel prices. Lu said he could raise his fourth-quarter forecast for panel makers later because of sustainable prices.
AU Optronics and Chi Mei are sourcing 40 percent of glass they use from Corning, Lu said. He retained his “buy” rating on AU Optronics.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
TARIFF CONCERNS: The chipmaker cited global uncertainty from US tariffs and a weakening economic outlook, but said its Singapore expansion remains on track Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in producing power management and display driver chips, yesterday withdrew its full-year revenue projection of moderate growth for this year, as escalating US tariff tensions raised uncertainty and concern about a potential economic recession. The Hsinchu-based chipmaker in February said revenues this year would grow mildly from last year based on improving supply chain inventory levels and market demand. At the time, it also anticipated gradual quarter revenue growth. However, the US’ sweeping tariff policy has upended the industry’s supply chains and weakened economic prospects for the world economy, it said. “Now
RSS