AU Optronics Corp (AUO, 友達光電) yesterday posted smaller quarterly losses as higher TV panel prices helped cushion the effect of a slow season and supply chain disruptions due to the COVID-19 pandemic.
While it was the fifth consecutive quarter that the company ended up in the red, net losses of NT$4.99 billion (US$167.44 million) last quarter were significantly smaller than losses of NT$8.83 billion in the previous quarter and NT$3.69 billion a year earlier.
The pandemic significantly impacted whole supply chains, as anti-virus measures and transportation restrictions caused a labor shortage and component supply crunch in the first quarter, AUO said, adding that inventories jumped 18.8 percent sequentially to NT$27.88 billion last quarter.
Average selling prices dropped 0.67 percent to US$296 per square meter last quarter from US$298 a quarter earlier, it said.
However, the company expects the pandemic to be a boon this quarter, as remote learning, work-from-home and play-at-home trends are spurring demand for flat panels used in laptops, PC monitors and medical devices.
As a result, large-sized panel shipments are forecast to grow 20 percent sequentially this quarter, while average selling prices are expected to drop about 5 percent, it said.
“We saw some positive impact from the pandemic. Because of stay-at-home, work-from-home and e-schooling trends, we saw significant increases in demand for our information technology [IT] products,” AUO chairman Paul Peng (彭双浪) told investors.
To cope with rising demand for advanced IT panels, AUO is to roll out new 4K mini-LED panels used in 27-inch and 32-inch laptops next quarter, targeting content creators and PC game players.
Overall, “second-quarter revenue will be better than the first quarter,” Peng said.
AUO posted revenue of NT$53.69 billion last quarter, down 13.42 percent quarterly and 19.51 percent annually.
Due to the shutdown of TV assembly lines in Mexico and other parts of the world due to coronavirus containment measures, AUO said it holds a “conservative” view about TV panel shipments this quarter.
Supply chain disruptions and the postponement of the Tokyo Olympic Games are affecting demand for TV panels, it said.
Shipments of small-sized panels are expected to drop a low-single-digit percentage this quarter amid dwindling demand for displays used in smartphones and automobiles, AUO said.
Business visibility for the second half of this year is unclear as the pandemic is taking a toll on the global economy and job market, and dampening consumer confidence, Peng said.
On the plus side, the travel bans would limit panel supply from new fabs and should help improve the industry’s supply-and-demand dynamics, he said.
STATE SUBSIDIES: The talks over a factory in Dresden have a top end on par with what Japan is offering TSMC and outdo a cap other firms are being offered in Europe Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is in talks to receive German government subsidies for as much as 50 percent of the costs to build a new semiconductor fab in the country, people familiar with the matter said. The government is in ongoing negotiations with TSMC, as well as its partners on the project — Bosch Ltd, NXP Semiconductors NV and Infineon Technologies AG — the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the final subsidy amount could still change. Any state aid must also
South Korea would avoid capitalizing on China’s ban on a US chipmaker, seeing the move by Beijing as an attempt to drive a wedge between Seoul and Washington, a person familiar with the situation said. The South Korean government would not encourage its memorychip firms to grab market share in China lost by Micron Technology Inc, which has been barred for use in critical industries by Beijing on national security grounds, the person said. China is the biggest market for South Korea semiconductor firms Samsung Electronics Co and SK Hynix Inc and home to some of their factories. Their operations in China
GEOPOLITICAL RISKS: The company has a deep collaboration with TSMC, but it is also open to working with Samsung Electronics Co and Intel Corp, Nvidia’s CEO said Nvidia Corp, the world’s biggest artificial intelligence (AI) GPU supplier, yesterday said that it is diversifying its supply chain partners in order to enhance supply chain resilience amid geopolitical tensions. “All of our supply chain is designed for maximum diversity and redundancy so that we can have resilience. Our company is very big and so we have a lot of customers depending on us. And so our supply chain resilience is very important to us. We manufacture in as many places as we can,” Nvidia founder and chief executive officer Jensen Huang (黃仁勳) said in response to a reporter’s question in
POWER FORWARD: The US company’s bullish revenue projection also lifted the shares of Taiwanese chipmaker TSMC and Japanese equipment supplier Advantest Nvidia Corp’s forecast for surging revenue surprised even the most bullish analysts on Wall Street, propelling the chipmaker to the cusp of a US$1 trillion market capitalization and igniting a global jump in stocks linked to artificial intelligence (AI). The Santa Clara, California-based company gained as much as 29 percent in extended US trading, on course for a record high, after saying it expects sales to reach about US$11 billion in the three months ending July. That gain puts Nvidia on track also to rack up the biggest one-day valuation jump in US company history. Nvidia, the biggest supplier of the advanced