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Flat panel makers suffer sales decline in September

2011/10/08 13:18:20

Taipei, Oct. 8 (CNA) Chimei Innolux Corp. and AU Optronics Corp. (AUO), two of Taiwan's leading flat panel makers, reported a decline in sales for September due to falling product prices.

Chimei Innolux said Friday it posted NT$41.47 billion (US$1.36 billion) in consolidated sales for September, down 1.3 percent from August and also down 9.1 percent from a year earlier.

AUO recorded NT$32.92 billion in consolidated sales for September, down 1.1 percent from a month earlier and also down 21.6 percent from a year ago.

In the third quarter, Chimei Innolux's sales totaled NT$124.70 billion, up 2.5 percent from the second quarter, while AUO's revenue was up 0.9 percent from the previous quarter at NT$98.93 billion.

According to DisplaySearch, a market advisory firm, prices of liquid crystal display (LCD) monitors and panels for notebook computers remained flat in early October, but TV screens faced downward pressure in pricing.

DisplaySearch said flat panel makers have been selling products at prices below production costs and such pressure is mounting amid a supply glut.

Grand Cathay Investment Service Corp. agreed, saying TV panel prices fell 13 percent during the August-September period and continued to weaken in October.

Chimei Innolux and AUO may incur further losses under such unfavorable circumstances, Grand Cathay said.

In the first half of this year, AUO incurred NT$24.66 billion in net loss, compared with NT$18.52 billion in net profit a year earlier, while Chimei Innolux posted NT$27.05 billion in net loss, compared with NT$13.34 billion in net profit a year ago.

In addition to the impact from falling product prices, Grand Cathay said, AUO may have to shoulder losses from its investments in the solar energy business overseas for the third quarter, while Chimei Innolux, which shipped more TV panels than AUO, is likely to report larger losses than its rival in the quarter.

In the third quarter, Chimei Innolux's shipments of large sized panels, which refer to 10-inch or larger products, rose 4.3 percent from the second quarter to 36.99 million units, while shipments of small and medium sized panels grew 15.9 percent to 110 million units.

During the same period, AUO's shipments of large sized panels rose 0.2 percent from the previous quarter to about 29.69 million units, while shipments of small and medium sized panels gained 14.4 percent to some 52.04 million units.

(By Pan Chi-i and Frances Huang)
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