Taiwan Panel Firms Likely To Stay Unprofitable Until 2Q19

Major Taiwan-based LCD panel makers are unlikely to make profits until the second quarter of 2019 at the earliest as continued price falls of large-size panels will offset a rebound in prices of small- and medium-size panels in the first quarter, according to industry sources

The top-two makers – Innolux and AU Optronics (AUO) – both are conservative about the prospects for the first quarter of 2019 due to seasonal factors as well as the volatile prices of large-size panels.

Innolux posted a net loss of NT$700 million (US$22.73 million) in the fourth quarter of 2018 as gains generated from non-display units were eroded by a net loss of NT$1.4 billion of its core display business.

Although AU Optronics (AUO) posted a net profit of NT$280 million for all of 2018, it incurred a net loss of NT$1.26 billion of its core display business.

Looking into the first quarter of 2019, Innolux’s large-size panel shipments are expected to sink 14-16% from a quarter earlier with their ASPs to remain flat, while shipments of small- to medium-size models will drop 17-19% with their ASPs to plunge 14-16%.

AUO expects its shipments of large-size panels to drop 7-9% sequentially in the first quarter with their ASPs to fall 4-6% correspondingly; and shipments of small- to medium-size panels will tumble by 20% but their ASPs will increase slightly thanks to optimization of its product mix.

HannStar Display also reported a net loss of NT$1.208 billion or NT$0.37 per share for the fourth quarter of 2018. But for all of 2018, it posted net profits of NT$1.021 billion or NT$0.32 per share. The company’s EPS came to NT$2.10 in 2017.

HannStar saw its sales bounce 58.5% on month to NT$1.118 billion in January before suffering a setback of 25% to NT$881 million in February. Overall, HannStar is expected to perform rather steady in 2019, the sources estimated.

Chunghwa Picture Tubes (CPT) posted a net loss of NT$7.557 billion or NT$0.93 per share in the first three quarters of 2018, and losses for all of 2018 are expected to widen by year-end on decreased revenues caused by temporary suspension of its operations due to financial difficulties.

CPT is expected to continue to operate in the red in the first quarter of 2019 as its revenues continue to contract, indicated the sources. The company saw its revenues drop 81.5% on month to NT$174 million in January and drop another 40.9% sequentially to NT$103 million in February.―Digitimes

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