LCD panel maker Innolux Corp (群創) yesterday said it was cautiously optimistic about second-half prospects as an imminent glass substrate supply constraint and an ongoing chip shortage would curb supply and avert a glut.
The supply of glass substrates might start declining this month at the earliest, as some manufacturers commence annual factory maintenance, the Miaoli-based company said.
“We believe this should help ease industry concern over a supply-demand imbalance as some capacities, which are used to make panels for monitors, notebooks or TVs, would be down,” Innolux president James Yang (楊柱祥) told an investors’ teleconference.
Photo: Lisa Wang, Taipei Times
The reduced supply would cut flat-panel production by about 360,000 units, Yang estimated, adding that a glass substrate supplier has said it plans to cut utilization by 15 to 20 percent.
Because of reduced glass substrate supply, “we are cautiously optimistic about the second-half market situation,” Yang said. “Market demand remains strong.”
Innolux forecast that shipments of panels for computers and TVs would grow by a low-single-digit percentage sequentially this quarter, benefiting from back-to-school and return-to-office demand for commercial laptops and monitors.
Average selling prices would climb by a low-single-digit percentage during the same period, it said.
Asked about Innolux’s long-term supply agreement with Chinese panel maker Sakai SIO International Guangzhou Co, company chairman Jim Hung (洪進揚) said the deal would boost the company’s output by about 2 to 3 percent next year.
Based on the agreement, Innolux would make a prepayment of 4 billion yuan (US$618.4 million) this year and next year to secure 65-inch and 75-inch TV panels from SIO’s G10.5 plant during the 2022-2033 period.
Innolux expects the strategic partnership to lift its profit margin, as G10.5 has a cost advantage over Innolux’s G6 and G8.5 factories in producing large TV panels, Hung said.
Innolux and local rival AU Optronics Corp (友達光電) do not operate G10.5 fabs, as the two have long decided that they would not join the capacity expansion race with Chinese rivals, but would rather focus on boosting their products added value.
Innolux’s net profit last quarter soared 85.13 percent to a record NT$21.42 billion (US$770.14 million).
That compares with earnings of NT$11.57 billion in the first quarter and losses of NT$5.78 billion a year earlier.
Gross margin rose to 33.1 percent last quarter, from 25.8 percent in the first quarter and 2.8 percent in the same period last year.
Revenue last month grew 35.6 percent to NT$32.25 billion, compared with NT$23.77 billion in July last year.
That represented a monthly increase of 2.3 percent from NT$31.51 billion, thanks to a 3.8 percent growth in shipments of small and medium-sized panels last month.
Shipments of panels for PCs and TVs contracted 2.3 percent month-on-month.
Charming US President Donald Trump one week, angering China the next, Japanese Prime Minister Sanae Takaichi has had a busy start and is riding high in the polls, all on a few hours of sleep a night. However, the honeymoon might end soon for the Margaret Thatcher-admiring leader if a spat with China escalates further and she fails to keep inflation in check. “I believe Prime Minister Takaichi will surely do what she needs to do, so I trust her,” Kozue Otsuka, 50, told reporters at a festival this week for business owners seeking good fortune. While buying a lucky kumade rake featuring
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
RSS