Flat-panel maker AU Optronics Corp (AUO, 友達光電) yesterday said the COVID-19 outbreak has not dented customer demand or halted production, but the industry might face more headwinds after the second quarter, as the pandemic is escalating in the US and Europe, two of the world’s largest consumer electronics markets.
The virus outbreak is likely to last longer than most people thought, the company said.
“It is unavoidable that the pandemic will affect the global economy this year. It is difficult to gauge how big the effect will be,” AUO chairman Paul Peng (彭双浪) told reporters in Hsinchu.
Photo: CNA
The outbreak has not yet affected manufacturing, as AUO’s customers have continued to replenish their TV panel inventories, which helped boost panel prices in the first quarter, Peng said.
Demand for TVs might remain unscathed, even if the Tokyo Olympic Games are changed, as long as the Games are staged behind closed doors, he said.
“The company did not suspend any production lines in Taiwan or China during the Lunar New Year holiday. All of our production lines operated normally,” he said. “First-quarter financial performance should be in line with our forecast.”
AUO last month said that shipments of flat panels for TVs and PCs would drop 5 percent quarter-on-quarter this quarter, while average selling prices for the panels would climb about 5 percent due to a better product mix.
The initial outbreak had primarily affected supply chains and logistics, as China restricted transportation to curb the spread of the virus, Peng said.
The company has helped its suppliers of materials and components to resume production in China, he added.
However, it still took much longer than expected to ship products to customers due to large-scale lockdowns in China, Peng said, adding that it took about seven days to ship products to customers in Chongqing from a factory in Jiangsu Province’s Suzhou, as opposed to the two days usually required.
To minimize logistics risks, AUO is assessing the feasibility of allocating production in other facilities, Peng said.
However, some consumer electronics might become pricier due to supply chain shifts, he said.
AUO has resumed 95 percent of its production and the situation would become even healthier next month as suppliers are restoring production, AUO president Frank Ko (柯富仁) said.
On the plus side, the company said that it had seen strong demand for displays used for interactive whiteboards and tablets, as schools began offering distance learning to students after closing campuses amid the coronavirus outbreak.
There is also incresaed demand for displays used in medical devices, the company said.
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