LCD panel maker AU Optronics Corp (AUO, 友達光電) returned a profit in the third quarter — the first quarter in eight — as demand boosted by the COVID-19 pandemic drove shipments of large TVs and notebook computers.
The stay-at-home, work-from-home and distance-learning trends helped the Hsinchu-based company make NT$2.89 billion (US$99.95 million) in net profit last quarter, reversing a loss of NT$2.96 billion in the second quarter and a loss of NT$3.99 billion in the third quarter last year.
That translated into earnings per share of NT$0.3, versus minus-NT$0.31 a quarter earlier and minus-NT$0.41 a year earlier.
Photo: Chen Mei-ying, Taipei Times
The firm expects the uptrend to extend into this quarter and even to “overflow” into the first half of next year, as a resurgence of the pandemic hits many countries, further supporting the stay-at-home economy.
The prices of TV and PC panels this quarter are expected to increase by 8 to 9 percent quarterly, following an uptick of 8.82 percent in the blended average selling price to US$333 per unit last quarter, it said.
While unit shipments are expected to slide, factory utilization should remain high, similar to last quarter’s 95 percent, it added.
“The industry’s seasonal cycles this year have been upended by the pandemic,” AUO chairman Paul Peng (彭雙浪) told investors yesterday. “We think the first quarter will be a trough, as we expected. Operations will improve quarter by quarter in the remainder of this year.”
On the demand front, the company sees the stay-at-home economy continuing to drive robust demand in the fourth quarter, Peng said.
Remote schooling has prompted strong demand for Chromebooks, he said, adding that the company has accumulated a large backlog of orders for Chromebook panels.
Global sales of TV sets last quarter rose about 11 percent from a year earlier, beating the market’s expectation of 3 percent growth, AUO said.
Notebook computer shipments last quarter rose 35 percent and whole-year shipments are likely to register double-digit percentage growth, the company said.
On the supply side, new capacity expansion in China has slowed, as the government slashed subsidies and allocated more resources to support semiconductor technology development in the wake of the US-China trade dispute, Peng said.
Tight component supply is a major concern, he said, adding that the company is also closely monitoring the economic fallout of geopolitical tensions and the pandemic.
AUO holds a positive outlook for the industry long term, with it likely to move toward healthy, market-oriented development over the next few years in the absence of intervention by the Chinese government, Peng said.
The company said that it expects capital spending this year to reach about NT$20 billion.
Yesterday, Innolux Corp (群創) reported that it also swung into the black last quarter with a net profit of NT$1.54 billion, or NT$0.16 per share, compared with a loss of NT$4.78 billion in the second quarter.
The company posted a net loss of NT$3.89 billion in the third quarter last year.
Innolux holds a positive outlook for this quarter, expecting shipments of large panels to drop about 5 percent from last quarter, while the average selling price is expected to rise by 8 to 9 percent from last quarter.
ARIZONA PROJECT: A spokeswoman said that TSMC appreciates the support from US authorities, which gives it and its partners confidence about future investments City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain. The city agreed to provide about US$200 million to develop roads, sewers and other infrastructure, according to a notice from the city council. At least one additional set of traffic lights would be included for a cost of approximately US$500,000. The company is conducting due diligence on several locations in Phoenix with a final decision to
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
A.P. Moller-Maersk A/S is planning to launch a US$1.6 billion share buyback program as the world’s biggest container shipping company weathers the COVID-19 crisis better than expected. Copenhagen-based Maersk, which on Tuesday raised its guidance for a second time since last month, reported a 39 percent rise in earnings before interest, taxes, depreciation and amortization to US$2.3 billion in the third quarter. Profit by that measure, before restructuring and integration costs, would reach US$8 billion to US$8.5 billion this year, the company said. Its previous guidance was for US$7.5 billion to US$8 billion. “The global economic environment was [in the third quarter]
OPPORTUNITY: After Huawei said it would sell a sub-brand, potentially exempting it from the US ban, the Hsinchu-based chipmaker eyes the chance to boost sales in China MediaTek Inc (聯發科) yesterday became the nation’s second-most valuable listed company after its market capitalization climbed to NT$1.157 trillion (US$40.23 billion) amid investors’ optimism of new business opportunities, while Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, fell one notch to third with a market capitalization of NT$1.153 trillion. The increase in MediaTek’s value came as its shares rallied 4.6 percent to close at NT$728 yesterday, as investors expected the handset chip supplier to benefit from Huawei Technologies Co’s (華為) decision to sell its low-to-mid-range smartphone business under the Honor (榮耀) sub-brand. On Tuesday, Huawei announced
RSS