AU Optronics Corp (AUO, 友達) yesterday reported 80.8 percent annual growth in net income of NT$8.88 billion (US$293.76 million) for last quarter and said steady and robust LCD panel demand is likely to extend into this quarter.
Last quarter’s results made it the fifth consecutive profitable quarter for the firm, one of the nation’s largest LCD panel makers.
Gross margin was 17.5 percent last quarter, up 4.35 percentage points from 13.15 percent in the same period of last year, while operating margin rose by 4.4 percentage points annually to 11.1 percent.
“The LCD panel industry is expected to continue growing healthily this quarter. We estimate AUO’s production utilization can maintain a high level similar to previous quarters’,” AUO chairman and chief executive officer Paul Peng (彭双浪) told a teleconference.
Production utilization rate was above 90 percent last quarter, the company said.
Peng said some people might doubt his optimism about the supply and demand situation this quarter, as China’s TV shipments dropped as much as 16 percent annually during China’s long National Day holiday at the beginning of this month.
However, investors should focus on the shipments breakdown in the Chinese market, Peng said, noting that contribution from the 50-inch and larger TVs accounted for 56 percent of the total TV shipments the Chinese holiday.
The 4K-resolution TVs, including larger TVs, contributed a record 73 percent of the total shipments in the Chinese market, Peng said.
“It indicates a rising demand for the higher-specification, larger and more value-added TVs in China, which is a positive sign for the industry,” Peng said.
Market trends in China also benefit AUO, as those kinds of products are the company’s main focus, he said.
Supply and demand for global LCD panels is expected to grow by between 5 percent and 7 percent next year, which would lead to a relatively healthy balance despite plans by some of his firms’ Chinese peers to expand their production capacity, he said.
China’s largest LCD panel manufacturer, BOE Technology Group (京東方), is set to ramp up its first 10.5-generation plant in the first quarter of next year, while China Electronics Panda Crystal Technology Corp (中電熊貓) plans to begin mass production of two 8.6-generation lines.
Given that BOE’s new production line is to be the world’s first 10.5-generation line and China Electronics Panda Crystal is new to the LCD panel industry, Peng said he believes both firms are going to face longer learning curves before they can deliver high yield products, which means their new production lines would have a limited impact to the industry next year.
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