Flat-panel maker AUO Corp (友達) yesterday said its losses in the first quarter of this year widened to NT$10.91 billion (US$355.3 million) due to sluggish demand for notebook computers from enterprise customers and unfavorable foreign exchange rates.
However, the company retained its growth outlook for the remainder of this year.
It was the fourth straight unprofitable quarter for the Hsinchu-based company, after registering a quarterly loss of NT$10.21 billion in the fourth quarter of last year.
Photo: Chen Mei-ying, Taipei Times
AUO blamed a foreign exchange loss of NT$1.1 billion and fewer solar module shipments for the worse-than-expected performance.
Losses in its display business improved NT$2.4 billion from the previous quarter, thanks to a pickup in panel demand for TVs, consumer PCs and consumer electronics, as panels approach supply-demand parity in the second quarter, AUO said.
Gross margin worsened to minus-9.5 percent, compared with minus-8.7 percent in the previous quarter, the company said.
“With panel supply-demand dynamics returning to a balance, prices of most panel products will stop stabilizing and even start to rebound. Therefore, we believe [revenue] will increase each quarter in the remainder of this year,” AUO chairman Paul Peng (彭浪) told an online investors’ conference.
“The second quarter will be better than the first quarter,” Peng said. “The second half will be better than the first half, based on the messages from our customers.”
The company expects a seasonal uptick in the second half, Peng said.
AUO said it has begun seeing inventory buildup demand from Chinese customers ahead of the nation’s 618 shopping festival in June, and expects the year-end holiday season in the US and Europe to further fuel panel demand in the second half.
As Chinese consumers remain conservative about spending after the COVID-19 restrictions were lifted at the beginning of this year, AUO said it is closely monitoring their spending behavior.
This quarter, shipments of TV and PC panels are expected to rise about 20 percent quarter-on-quarter, AUO said.
Average selling prices are expected to remain flat or increase mildly from US$322 per square meter during the first quarter, it said.
The company said flat panels used in vehicles would be the bright spot this quarter, with revenue from that segment expected to top NT$10 billion.
Factory utilization would increase significantly from 66 percent last quarter, AUO said.
Although most panel makers are raising equipment usage to cope with increasing demand, AUO said it does not expect oversupply risks, given most production expansion was undertaken in a disciplined manner.
To avoid boom-and-bust cycles, AUO said it is accelerating its diversification efforts and aims to boost non-panel revenue contribution to more than 20 percent in the next two to three years, from 14 percent last year.
AUO said capital spending for this year would be NT$35 billion.
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