Innolux Corp (群創), which makes flat panels used in TVs and computers, yesterday said it is cutting production amid weakening demand and slumping prices.
The Miaoli-based flat-panel maker’s comments came as demand began losing steam last month after experiencing the industry’s longest boom of one-and-a-half years.
“The flat-panel industry is cyclical by nature. After a long period of upticks, it is normal to see price adjustments,” Innolux chairman Jim Hung (洪進揚) told reporters on the sidelines of a media briefing in Taipei.
Photo: Chen Mei-ying, Taipei Times
Asked whether the company plans to cut its financial forecasts for the third quarter, Hung said: “We might see a slight adjustment in prices.”
Innolux might cut its estimate of a low-single-digit percentage increase in prices for the current quarter, he said.
The company kept unchanged its estimate of a low-single-digit percentage sequential increase in shipments of TV and PC panels this quarter.
“Shipments might be adjusted in the fourth quarter,” Hung added.
Innolux plans to idle certain manufacturing equipment for maintenance and might adjust its product portfolio, such as reducing TV panel shipments to align with changes in market demand, he said.
Innolux has seen lower demand for Chromebooks for students, but corporate demand for notebook computers is picking up and is expected to fill the void for the second half of this year, Hung said.
Innolux also attributed supply-chain disruptions, international port congestion and key component shortages to the already falling demand.
The company aims to reduce its dependence on TV panels by reducing its revenue contribution to 30 percent in the long run, from a hefty 40 percent last quarter, Hung said.
Flat panels used in notebook computers, monitors and mobile phones account for a third each, he added.
Overall, Innolux remains optimistic about the flat-panel industry’s long term outlook, as most panel makers have given up racing for capacity and are refocusing on profit improvement.
“There are no drastic boom-and-bust cycles like before,” Hung said. “Even seasonal cycles are not as clear as they used to be.”
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