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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
RSS