Third biggest LCD maker sees laptop, camera rebound

Executives at AU Optronics said demand for notebook PCs and digital cameras has picked up significantly recently, and predicted better times ahead

Executives at AU Optronics, the world's third largest LCD panel maker by revenue, claim demand for notebook PCs and digital cameras has picked up recently, and predicted better times ahead.

"There has been a sharp uptick in notebook demand," president of AU Optronics, H.B. Chen, said last week. The company's supply of notebook PC screens was tight now, a situation likely to continue over the next few months. Demand for digital camera screens was also rebounding.

"Our second-quarter loading rate will clearly be better than the first quarter," he said, indicating the company will increase production. AU had slowed production at some factories because of an inventory glut that caused LCD panel prices to fall over the past several months.

His statements should help ease some industry concerns about the global notebook PC sector, but it's not necessarily a good sign for users.

AU produces nearly a fifth of the world's LCD screens, giving it a unique view of the health of certain IT product categories. An industry glut has kept LCD prices down over the past several months, a situation that can be great for users because oversupply often sends LCD panel prices plunging. LCD panels are often the most expensive part of a device, so lower panel prices can have a big impact on end-user product prices. A return to health for the industry could curtail some of the steep price declines users have seen on certain products.

The January through March quarter should be the weakest quarter of the year for AU, executive vice-president at the company, Kuma Hsiung, said.

Last year's glut was worsened because companies started stockpiling LCD screens, which meant that once demand for some end-user products softened, the plentiful supply turned into a serious inventory problem, he said. Now, inventories were clearing out, so that the second quarter shouldn't hurt LCD panel pricing as much as in the current quarter.

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Dan Nystedt

IDG News Service
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