Panel prices stabilize AUO Chi Mei's gross margin improvement

The panel industry has recently been widely used. Not only is the large-size panel offer stable (generally expected to hold at least until the end of the third quarter), the average size of TV panel shipments will be enlarged and the volume of shipments will increase. Depreciation of the 5th-generation line and 6th-generation line of panel makers will be completed one after another. On the other hand, some individual manufacturers also launched new products with good sales or received new orders respectively. Not only the panel maker Chi Mei Optoelectronics reported that the industry had turned to profit in a single month in August this year, and it has reached a level of one month since the end of the month. AUO has also been expected to Gross profit margin may turn positive in the third quarter of this year and the industry may make a small profit.

After losing for a few seasons (Chimi has lost eight consecutive quarters since the third quarter of 2010 to the second quarter of 2012, and AU has lost seven quarters from the fourth quarter of 2010 to the second quarter of 2012), Finally, in the third quarter of 2012, both the single-month return of the industry and the single quarter had the opportunity to challenge the bad news or the small profit, encouraging the recent strong share prices of Chi Mei and AUO, and Chi Mei to reach a daily limit of 9/14. AUO also gained 6%.

According to recent survey data from various market research institutes, quotation for large-size panels, especially TV and monitor application panels, has been generally stable in recent months. Although some models have occasionally fallen slightly, they are basically flat, and some sizes are also tight due to supply and demand. And price increases. The panel price stability is one of the key factors supporting the stable operation of panel makers.

In addition, thanks to the launch of a new wave of energy-saving subsidy policies in mainland China and the commencement of the preparation of Chinese TV brands in response to 11 promotions, the sales of television panels have also been quite prosperous. Among them, AUO Shengsheng benefited from the increase of SONY TV panels and Apple iPad Mini panel output. Chimei benefited from the growth of shipments of new-sized TV panels. At present, TV panels account for AUO and Chi Mei’s revenue by 4-5 percent. As a result, shipments of TV panels were buoyant and provided concrete support for AUO and Chi Mei's operations in the third quarter.

In addition, AUO and Chi Mei's 2012 depreciation expense pressures both decreased. Among them, AUO's average quarterly depreciation expense in 2012 was estimated to be NT$19 billion, an increase from the average quarterly depreciation expense of NT$22 billion in 2010-2011. About 13.6%. Chimei's 5.5-day line depreciation has already ended in June of this year, and another 5th-generation line depreciation will be completed in the third quarter of this year. The gradual reduction of depreciation expenses, together with the increase in capacity utilization, will help AUO and Chi Mei to gradually improve their gross margins.