Innolux, AUO March sales growth outpace market


By Kathryn Chiu , The China Post

TAIPEI, Taiwan — March sales generated by Innolux Corp. (群創光電) and AU Optronics Corp. (AUO,友達光電) grew nearly 50 and 20 percent respectively from February, outpacing the market average of 18 percent. Simultaneously, Sakai Display Products (SDP), a 10th-generation LCD panel plant in Japan jointly owned by Sharp and Hon Hai Group Chairman Terry Gou, is purported to be expanding glass substrates production capacity by 50 percent by the end of 2014. A recent NPD DisplaySearch survey showed that global flat panel sales in March totaled US$6.7 billion, down 17 percent from a year earlier despite increasing by 18 percent month on month, NPD DisplaySearch said. LG Display of South Korea ranked as the largest screen supplier in March with sales of US$1.84 billion, ahead of Samsung Electronics Co., which had US$1.25 billion in sales, the survey showed. Taiwan’s Innolux Corp. and AU Optronics Corp. came in third and fourth, respectively, after posting US$1.17 billion and US$1.12 billion in sales during the month. Japan-based Sharp Corp. came in fifth with sales of US$390 million, followed by China’s BOE Technology Group Co. (京東方) and China Star Optoelectronics Technology Corp. (CSOT,華星光電), which had US$260 million and US$257 million in sales, respectively. Compared to February results, monthly sales growth of Innolux, AUO and CSOT in March outranked peer companies in March with 50.1 percent, 20.7 percent and 38.89 percent. In an interview with the Central News Agency, Grand Fortune analyst Chen Wei-tai attributed the March sales increase primarily to Chinese buyers building up inventory ahead of the May 1 Labor Day holiday, which is a peak shopping season in China. Chen said sales growth momentum in the global flat screen business is expected to continue to the end of April, but it remains to be seen whether sales will continue their upswing in May after the conclusion of China’s Labor Day holiday run.

SDP’s Expansion Increases Price Pressure Although LCD panel prices have shown signs of rebounding, a new wave of production capacity expansion of Hon Hai Precision-related Sakia Display Product (SDP) might add downward pressure on mid to large-sized panel prices later this year. According to the Commercial Times of Taiwan, SDP is expected to increase expenses in equipment by 1.84 billion yen and expand glass substrate output capacity by 50 percent to 120,000 glass substrates per month. SDP has turned a profit since last October. The expansion of SDP is aimed at supplying Apple with enough panels for the iTV. However, analysts said that SDP’s production capacity boost might weaken the large to mid-sized LCD panel market. The Ministry of Economic Affairs (MOEA) earlier indicated that even though Taiwan’s 4K2K panels possess many competitive advantages, mainland Chinese and Korean panel manufacturers continue mass production and price competition, which negatively impacts Taiwan’s panel orders.