AUO and CMO Place More Glass Orders in Q1 due to Fall Capacity

Taipei, Feb. 2, 2010 (CENS)--The capacity utilization of both AU Optronics Corp. (AUO) and Chi Mei Optoelectronics Corp. (CMO), the top-two thin film transistor-liquid crystal display (TFT-LCD) panel manufacturers in Taiwan, is close to 100% in the first quarter, driving them to place orders for 10% to 20% more glass than the fourth quarter of 2009, according to major glass supplier.

The first quarter has been a traditional off season for the panel industry, and panel makers' orders for glass implies better-than-expected operation results of panel makers might come, industry sources said.

Corning Inc. of the United States, the world's largest glass supplier, recently publicized its 2009 results and forecasted that its self-operated business (mainly from glass furnaces in Taiwan and Japan) in the first quarter is expected to grow 8% to 12% from the same period of last year. Industry insiders pointed out that Corning's forecast implied strong demand from Taiwanese panel manufacturers, whose panel shipments, however, might be limited by the glass supply shortage.

Industry experts attributed local panel suppliers' shipment growth in the first quarter to strong demand from mainland China. China just announced to purchase US$5.3 billion worth of panels from Taiwan this year, compared to originally planned US$10 billion, due to insufficient capacity of local panel makers.

Analysts of foreign institutional investors pointed out both AUO and CMO's capacity utilization rates are expected to maintain at high level if China continue to procure LCD TV panels from the island.