AUO, Chimei Innolux to See Losses Narrow in Q4

Taipei, Dec. 12, 2011 (CENS)--Taiwan's top two display panel manufacturers, namely AU Optronics Corp. (AUO) and Chimei Innolux Corp., are expected to see their net losses significantly drop in the fourth quarter of 2011 from a quarter ago for a variety of reasons, stated market observers.

Partly buoyed by growing shipments of high-profit 3D and LED-backlit panels, and partly by recovering consumer demand for LCD TVs seen since the first black Friday after Thanksgiving, Korean display panel makers, starting with LG Display, have gradually rallied in the fourth quarter from drastic downturns in business, with the overall capacity utilization rate to reach 80% during the period, stated analysts of WitsView, a monitor market researcher. This, the analysts noted, has indicated a positive sign that the industry's recovery has been on the way, and will benefit the aforementioned two Taiwanese makers of this kind.

Dampened by waning market demand for large-size display panels, AUO and Chimei Innolux listed net losses of NT$15.8 billion and NT$17.3 billion, respectively, in the third quarter of this year. However, in light of Korean counterpart's business turnarounds, institutional investors opine that the two Taiwanese companies are likely to reduce their losses to between NT$7 billion and NT$5 billion in the fourth quarter.

Hailing the industry's recovery, DisplaySearch, a Taiwan-based market survey institute, also pointed out that the two companies will surely fare better in 2012 than in 2011, mainly because write-offs of fully depreciated equipment in their 7.5-generation fabrication factory will help them to cut considerable operating costs to report improved business performance starting in the year.

In addition, the market researcher furthered, increasingly stabilized prices of display panels along with influx of rush orders will also enable Taiwanese companies to effectively narrow their net losses in the fourth quarter of this year.

The touted optimism can be proven partly by the fact that AUO already improved its combined revenue for November to NT$30.6 billion, edging down 2% from October, with shipment of large-sized display panels posting a 1.3% increase month-on-month.

Revenues by Taiwanese Display Panel Makers in November, 2011
Company	Revenue	M-on-M Growth Rate	Y-on-Y Growth Rate
AU Optronics Corp.	NT$30.6 B.	-2.0%	-17.1%
Chunghwa Picture Tubes Ltd.	NT$4.402 B.	-15.7%	23.4%
HannStar Display Crop	NT$3.335 B.	-6.9%	-4.3%

Source: Each company