Chimei Innolux Display Corp (CMI, 奇美電子), the nation’s largest LCD panel maker, posted a loss in the third quarter as sluggish demand drove equipment utilization down to as low as 60 percent.
In the third quarter, CMI lost NT$3.64 billion (US$119 million) after the company aggressively wrote off inventories because of gloomy demand, to compare with a net profit of NT$9.54 billion in the second quarter.
CMI booked losses of NT$1 billion in the last quarter alone because the New Taiwan dollar appreciated 4 percent against the US dollar during the quarter.
Gross margins contracted to 2.8 percent last quarter after factory usage dipped to between 60 percent and 65 percent on sagging demand, financial executive Eddie Chen (陳彥松) said by telephone. CMI had its factories at full capacity in the second quarter.
In the second quarter, gross margins stood at 12.8 percent.
“This is the trough [in terms of factory utilization],” Chen said.
“We expect a significant improvement in factory usage in the fourth quarter, which will help us improve our gross margins and costs,” Chen said.
Regarding demand, he said the company “is seeing positive signs. Prices are stabilizing and we are seeing the possibility of price increases for certain models.”
The third-quarter loss was unexpected.
Roger Yu (游智超), a flat-panel industry analyst with Polaris Securities Co (寶來證券), said he “did not expect CMI would make a loss in the third quarter.”
With its LCD monitor assembling business, CMI should have posted better third-quarter earnings than its local rival AU Optronics Corp (友達光電), which eked out a net profit of NT$227 million last quarter, Yu said.
Yu had projected that CMI would break even.
This quarter, shipments of PC and TV panels should increase from the 30.6 million units last quarter, Chen said.
After a 5 percent quarterly decline, the average selling price will remain flat or rebound slightly from US$$113 per unit in the third quarter, helped by rising shipments of products with better margins, such as LED-backlit TV panels, Chen said.
TV panels accounted for the majority, 41 percent, of the company’s revenue last quarter which was NT$137.05 billion.
CMI was created from a three-way merger of Innolux Display Corp (群創光電), Chi Mei Optoelectronics Corp (奇美電子) and TPO Display Co (統寶光電) on March 18.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS