AU Optronics Corp (AUO, 友達光電) yesterday posted smaller quarterly losses as higher TV panel prices helped cushion the effect of a slow season and supply chain disruptions due to the COVID-19 pandemic.
While it was the fifth consecutive quarter that the company ended up in the red, net losses of NT$4.99 billion (US$167.44 million) last quarter were significantly smaller than losses of NT$8.83 billion in the previous quarter and NT$3.69 billion a year earlier.
The pandemic significantly impacted whole supply chains, as anti-virus measures and transportation restrictions caused a labor shortage and component supply crunch in the first quarter, AUO said, adding that inventories jumped 18.8 percent sequentially to NT$27.88 billion last quarter.
Average selling prices dropped 0.67 percent to US$296 per square meter last quarter from US$298 a quarter earlier, it said.
However, the company expects the pandemic to be a boon this quarter, as remote learning, work-from-home and play-at-home trends are spurring demand for flat panels used in laptops, PC monitors and medical devices.
As a result, large-sized panel shipments are forecast to grow 20 percent sequentially this quarter, while average selling prices are expected to drop about 5 percent, it said.
“We saw some positive impact from the pandemic. Because of stay-at-home, work-from-home and e-schooling trends, we saw significant increases in demand for our information technology [IT] products,” AUO chairman Paul Peng (彭双浪) told investors.
To cope with rising demand for advanced IT panels, AUO is to roll out new 4K mini-LED panels used in 27-inch and 32-inch laptops next quarter, targeting content creators and PC game players.
Overall, “second-quarter revenue will be better than the first quarter,” Peng said.
AUO posted revenue of NT$53.69 billion last quarter, down 13.42 percent quarterly and 19.51 percent annually.
Due to the shutdown of TV assembly lines in Mexico and other parts of the world due to coronavirus containment measures, AUO said it holds a “conservative” view about TV panel shipments this quarter.
Supply chain disruptions and the postponement of the Tokyo Olympic Games are affecting demand for TV panels, it said.
Shipments of small-sized panels are expected to drop a low-single-digit percentage this quarter amid dwindling demand for displays used in smartphones and automobiles, AUO said.
Business visibility for the second half of this year is unclear as the pandemic is taking a toll on the global economy and job market, and dampening consumer confidence, Peng said.
On the plus side, the travel bans would limit panel supply from new fabs and should help improve the industry’s supply-and-demand dynamics, he said.
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