Flat panel maker Innolux Corp (群創) yesterday posted a seventh straight unprofitable quarter as global central banks’ interest rate hikes and soaring inflation depressed consumer spending on electronics that led to a supply glut.
To improve the imbalance of supply and demand, Innolux and its global peers have lowered factory utilization last year, the Miaoli-based company said in a statement.
Innolux posted a NT$18.64 billion (US$591.4 million) loss for last year, an improvement from a loss of NT$27.99 billion in 2022. Gross margin swung back to positive territory at 1.5 percent from minus-3.1 percent the previous year.
Photo: Lisa Wang, Taipei Times
During the final quarter of last year, Innolux’s losses widened to NT$3.24 billion, from a loss of NT$1.9 billion in the third quarter as customer demand subsided following the end of year-end shopping season. The average selling price dropped about 3.5 percent sequentially to US$269 per square meter during the final quarter.
Innolux expects the flat panel industry to usher in a growth period this year, thanks to better economic prospects worldwide and new TV replacement demand due to three major sports events, including the Paris Olympics and UEFA Euro 2024.
New artificial intelligence (AI)-enabled devices such as smartphones and PCs are also to drive demand, the Miaoli-based company said in the statement.
Innolux is accelerating its transformation efforts to expand into advanced chip packaging, auto displays and other new businesses beyond flat panels, the statement added.
Shifting away from flat panels would play a crucial role in the company’s transformation as those new businesses would help shield against the boom-and-bust flat panel industry and help the company report stable earnings, Innolux said.
The company in December last year said that its new panel-level-packaging services would start contributing revenue in the second half of this year.
Non-display products made up 28 percent of the company’s total revenue last year, up from 24 percent in 2022.
As the industry enters its off-season, Innolux expects shipments of large flat panels for TVs and PCs to decline by a low single-digit percentage this quarter from the previous quarter.
Overall average selling prices would increase by low single-digit percentage sequentially this quarter, the company forecast.
Innolux plans to spend NT$21 billion on new equipment this year, little changed from NT$21.4 billion last year.
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