LCD panelmaker Innolux Corp (群創) expects business to gradually improve this year, because a slump in panel prices is abating thanks to resilient demand for TVs and notebook computers as a hybrid work model is gaining popularity and more countries are viewing COVID-19 as an epidemic.
Overall, the flat-panel industry this year is likely to experience less price volatility as the COVID-19 situation improves worldwide, Innolux chairman Jim Hung (洪進揚) told an online investors’ conference yesterday.
“I don’t believe that the whole of 2022 will experience boom-and-bust cycles in terms of panel prices. This year won’t be a repeat of last year,” Hung said. “Global inflation is the only factor that could rock end-product demand.”
Photo: Chen Mei-ying, Taipei Times
Flat panels used in notebook computers could experience price corrections in the first half of this year, as inventories increase in the slow season, Innolux said.
The company said it has seen signs of an early recovery and expects the peak season to emerge earlier this year, given longer transportation times caused by COVID-19 restrictions.
“We believe there is still solid demand for notebook computers as people return to work using a hybrid model — working at the office and from home,” Innolux president James Yang (楊柱祥) said.
“Now that the logistics network requires four months, we expect customer demand to begin slowly climbing in the second quarter, rather than in the third and fourth quarters as usual,” Yang added.
In the TV sector, prices for smaller TVs began to pick up this quarter, thanks to easing gridlock at ports in the US and Europe, Yang said.
Prices of 40-inch TVs have stabilized of late, he added.
The most growth might occur in Asian markets, as central banks in the region are expected to walk back monetary loosening more gradually, Innolux said, adding that a lower comparison base also helps.
Innolux retained its first quarter forecast, with the prices of TV and notebook panels falling 1 to 3 percent and shipments remaining flat on a quarterly basis.
Innolux said rivals are building capacity based on market demand, not desired market share, so it does not expect a “capacity race.”
Unlike peer AU Optronics Corp’s (友達光電) plan to spend NT$100 billion to NT$150 billion (US$3.56 billion to US$5.34 billion) on a new 8.5G factory, Innolux said that it has no plans to make a significant investment in capacity expansion.
Innolux plans to spend NT$26 billion on capital expenditure this year.
The supply-chain disruptions caused by sanctions against Russia over its invasion of Ukraine should have minimal effect on company revenue or commodity supplies, as Innolux has limited exposure to the two countries, Hung said.
Local panelmakers might benefit from the geopolitical tensions as customers take precautionary measures and diversify suppliers to avoid disruptions, Hung added.
Innolux last year saw net profit surge to a record NT$57.53 billion, up from NT$1.64 billion in 2020, or earnings per share of NT$5.53, up from NT$0.17 in 2020.
Innolux did not disclose a cash dividend distribution plan, saying only that it would adopt a “stable” dividend distribution policy.
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