LCD maker reports profit even as prices tumble

LCD panel maker AU Optronics reported record financial results for 2004, despite falling panel prices.

AU Optronics, one of the world's biggest makers of LCDs (liquid crystal displays) used in computers and television sets, reported Thursday that its net income and net profit hit record levels in 2004, despite an industry-wide steep drop in LCD prices during the second half of the year.

AU Optronics, of Hsinchu, Taiwan, said its 2004 net income totalled NT$28 billion (AUD$1.12 billion as of Dec. 31, the last day of the period being reported), an increase of 78.5 percent from 2003 net income of NT$15.7 billion. The company's net sales were also sharply higher at NT$168.1 billion, an increase of 60.3 percent from net sales of NT$104.9 billion in 2003, it said.

Net sales for the fourth quarter totalled NT$39.5 billion, up just 1.9 percent from the previous quarter, the company said. It reported a net loss for the fourth quarter of NT$2.2 billion compared to a profit of NT$4.1 billion during the third quarter.

AU Optronics faced a tough year, as its average selling price for LCDs measuring more than 10 inches across the diagonal rose during the first half of the year to a high of US$281 before dropping sharply to US$215 during the third quarter and US$180 during the fourth quarter.

AU Optronics wasn't the only LCD panel maker faced with a sharp drop in prices. LCD panel makers in general faced severe oversupplies which drove prices substantially lower during the second half of 2004, said David Hsieh, a vice president at market research firm DisplaySearch.

The problem of oversupply became so serious in the fourth quarter that LCD panel makers were forced to sell panels at prices below their production costs, Hsieh said. "Nobody could make money," he said.

AU Optronics was able to offset some of the decline in prices by shipping more large LCD panels. It shipped 5.5 million large panels during the fourth quarter of 2004, compared to 4.4 million in the third quarter of 2004 and 3.6 million in the fourth quarter of 2003, it said.

Rising demand for LCD TVs and monitors has been one positive effect of the sharp drop in LCD prices, Hsieh said. Prices have stabilized and LCD panel makers should be set for a return to profitability during the first quarter of 2005, he said.

"Demand is very strong right now and it will get stronger," Hsieh said, adding that DisplaySearch does not foresee a shortage of LCD panels or a repeat of the severe oversupply situation in 2005.

For its part, AU Optronics expects to see growing demand for LCD TVs result in higher sales of LCD panels during the coming year. Next month it will begin mass production at a sixth-generation LCD panel manufacturing plant that uses glass substrates measuring 1.5 meters by 1.85 meters. A larger glass substrate means that more large panels can be produced from a single piece of glass, helping to cut production costs and raise manufacturing capacity.

AU Optronics has already produced pilot runs of 33-inch panels for LCD televisions and 19-inch panels for computer monitors at the sixth-generation plant, it said.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sumner Lemon

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?