Display panel maker AU Optronics Co (AUO, 友達光電) yesterday said that first-quarter net profit hit a 13-year high of NT$11.83 billion (US$423.26 million), as the COVID-19 pandemic-induced stay-at-home economy stimulated demand for panels for TVs and computers.
AUO expects the growth momentum to carry through the rest of the year and be sustainable in the longer term as work from home, remote schooling and home entertainment become the new norm.
A continued component supply crunch has added to the supply-demand imbalance in the panel industry, the company said.
Photo: CNA
“We are seeing very strong demand during the second quarter. We have clear order visibility until the end of this year. Some customers have approached us to discuss supply for next year,” AUO chairman Paul Peng (彭双浪) told an investors’ teleconference.
AUO usually starts new supply contract negotiations in October or November, Peng said.
“Overall, supply continues to be tight. Our factories have been running at full capacity since the middle of last year. We still cannot fully satisfy customers’ demand,” he said.
Addressing investors’ concern about overbooking risks, Peng said that “it is still manageable,” as customers are facing a significant supply gap of between 10 and 30 percent.
With shortages in the supply chain likely to persist, AUO expects its average selling prices to rise sequentially by a low-teen percentage this quarter, following a quarterly hike of 12.7 percent, or 43 percent annually, to US$424 per square meter last quarter.
Shipments this quarter should inch up by a low-single-digit percentage sequentially, capped by tight supplies of chips, glass substrates and other key components.
Certain production lines would also be temporarily halted for annual maintenance, leading to a slide in output, it said.
The COVID-19 pandemic has spurred demand for larger and higher-spec panels for TVs, monitors and notebooks as people tend to spend a longer time in front of their screens, AUO said.
AUO also has a more optimistic view of long-term prospects, with the display industry getting out of a boom-and-bust cycle, as Chinese manufacturers curb expansion without government support.
“Competition in the industry is no longer distorted, but has returned to normal market mechanisms,” Peng said.
Under such a benign competitive landscape, AUO should make stable profits in the next few years, Peng said.
During the quarter ending March 31, net profit surged to NT$11.83 billion, reversing losses of NT$4.99 billion in the same period last year.
On a quarterly basis, net profit soared about 40 percent from NT$8.44 billion in the final quarter of last year.
Gross margin improved to 22 percent last quarter, from 16.9 percent the previous quarter and minus-0.7 percent a year earlier.
AUO plans to budget NT$22 billion for capital expenditure this year, up 41 percent from NT$15.6 billion last year.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS