AU Optronics Corp (AUO, 友達光電) expects growth momentum to extend into the second half of this year on strong demand for commercial laptops and premium TVs, after yesterday posting 65 percent sequential growth in net profit last quarter.
Net profit expanded to NT$19.53 billion (US$698.87 million) in the second quarter, compared with NT$11.83 billion in the previous quarter and losses of NT$2.96 billion in the second quarter of last year.
The company attributed the growth to quarter-on-quarter price increases of 16 percent last quarter.
Photo: Chen Mei-ying, Taipei Times
Gross margin improved to 28.7 percent, up from 22 percent in the previous quarter and 2.7 percent a year earlier.
The Hsinchu-based flat-panel maker expects prices to increase about 5 percent sequentially this quarter, while shipments are to grow by a low single-digit percentage quarter-on-quarter.
The upbeat outlook comes amid concerns about inventory pileups and the imminent risk of oversupply after some Chinese makers unveiled capacity expansion plans. AUO expects panel supply and demand to reach a balance, as a key components shortage would cap the growth of new production.
Supply constraints of key components, primarily semiconductors, would remain for at least two to three years, AUO said, adding that it did not see unusual inventory increases with customers.
“We are optimistic about the market situation in the second half of the year,” AUO chairman Paul Peng (彭?浪) told investors. “We have high order visibility for the third quarter, as commercial product demand is to overcome consumer demand in fueling growth.”
Demand for notebook computer panels remains strong, AUO said.
The company has secured orders of notebook computer panels for premium and commercial models rather than consumer models, Peng said.
Businesses have resumed investments in information technology, as a hybrid model of working from home and at the office continues amid the COVID-19 pandemic, while governments are to invest heavily in infrastructure to accelerate a digital transformation driven by the pandemic, AUO said.
To meet demand, AUO plans to invest about NT$31.71 billion in expanding advanced notebook computer panel capacity in Taiwan over the next two to three years. The company is the world’s biggest supplier of low-temperature polysilicon displays, with a market share of 60 to 70 percent.
Commercial panel orders have also been driven by increasing demand for devices used in retail, medical, industrial and transportation settings, as countries gradually reopen their economies, allowing business to return to normal, AUO said.
That is adding to robust TV panel inventory demand ahead of year-end shopping sprees, the company said.
The Tokyo Olympic Games has also stimulated TV demand, especially for large TVs with high-end specifications, it added.
Shipments of the company’s 85-inch panels are to grow by a double-digit percentage year-on-year this quarter, after surging 50 percent annually last quarter, AUO forecast.
Factory utilization is to remain high this quarter, after reaching 95 percent last quarter, the company said.
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