AU Optronics' profit plunges with LCD prices
Taiwanese panel maker shifting focus to niche markets
KENSAKU IHARA, Nikkei staff writer
HUALIEN, Taiwan -- LCD panel maker AU Optronics on Wednesday reported a 53% decline in fourth-quarter net profit to 4.1 billion New Taiwan dollars ($140 million) amid price competition from Chinese rivals.
Sales for the three months ended in December fell 12% on the year to NT$80.6 billion. Demand has subsided for LCD panels for big-screen TVs in the U.S., China and emerging markets, prompting the Taiwan-based company to adjust inventories.
Meanwhile, China's BOE Technology Group fired up the world's first production line for 10.5-generation liquid crystal display panels in December, putting further pricing pressure on AUO.
With a wider buildup in panel inventories, unit prices are trending downward. LCDs fetched $373 a sq. meter in the October-December quarter, falling for a third consecutive quarter and down nearly 10% from a year earlier. Eroding margins contributed to AUO's operating profit sinking 50% on the year to NT$5.7 billion.
Competing against Chinese and South Korean peers on the investment front would be prohibitive for AUO. The Taiwanese manufacturer is instead focusing on developing niche markets such as wearable devices and on-board vehicle monitors.