Taiwan's display panel makers are expected to see sales improve further in the third quarter of 2023, as the peak season arrives, according to industry sources. For large-size panels, prices for both IT and TV applications continue rising, the sources said.
Although AU Optronics (AUO), Innolux, HannStar Display and Giantplus all reported declines in sales in July due to quarter-end effects, the panel industry is expected to receive a boost in sales from seasonal demand in the third quarter, the sources said.
AUO's July consolidated sales came to NT$21.26 billion (US$669.38 million), down by 7.4% sequentially but up 22.0% year on year. The company said its total panel area shipments for the month reached around 1.84 million square meters, down by 9.0% sequentially.
Innolux disclosed that its July 2023 consolidated revenue came to NT$18.5 billion, decreasing 4.3% sequentially but increasing 17.5% year on year. During the month, Innolux shipped 9.66 million units of large-sized products, a sequential decrease of 22.1%. Shipments for small- to medium-sized products arrived at 23.85 million units, down 1.1% sequentially, the company said.
HannStar reported NT$1.1 billion in July consolidated sales, down 10% sequentially and 18.9% year on year. Its small-to medium-size panel shipments reached 22.63 million units, down 32.4% sequentially. Its large-size and own-brand products came to 57,000 units in July, down 49.7% sequentially.
Giantplus' consolidated sales arrived at NT$723 million in July, down 9% compared to June's and down 18.9% compared to the sum for the same month of 2023.
AUO chairman Paul Peng has noted that the panel industry has already seen inventory return to healthy levels, and some product segments' inventory is already lower than pre-pandemic levels. He expects the order visibility to improve for the panel industry in the second half of 2023, and supply-demand conditions will become healthier.
For the third quarter, the back-to-school demand and the upcoming year-end holiday shopping will boost sales at the display panel makers. AUO expects its third-quarter 2023 sales to improve sequentially.
Innolux president James Yang has noted that panel makers have been cautiously controlling production utilization rates, and as demand grows, sales in the second half of 2023 will improve compared to the first half of the year, and sales momentum will last into 2024.
Innolux expects that large-size panel shipments in the third quarter will be flat compared to those in the second quarter, but the average selling price (ASP) will rise 7-9%. For small- to medium-size panel shipments, Innolux expects a decline of 7-9% sequentially in the third quarter.
The rising prices for large-size panels allowed AUO and Innolux to sharply narrow their losses in the second quarter, and the two companies may be able to report profits in the third quarter, industry sources said.
HannStar was also able to reduce its loss in the second quarter compared to the first quarter. As the company is not expected to complete its equipment adjustments until the end of September, the sources said that HannStar will see its 2023 sales peak in the fourth quarter. But its third-quarter 2023 sales will still improve sequentially, the sources added.
Giantplus already saw its utilization rates improve in the second quarter, and they are expected to rise to 70-80% in the second half of 2023. In terms of product mix, Giantplus expects 45-50% of its revenues in 2023 to come from niche applications, 35-40% from automotive panels, and 10% each from the consumer segment and others.
Although brand vendors have expressed concerns about rising TV panel prices, their demand remains significant in August as they start preparations for the year-end shopping, the sources said.
The panel makers' cautious control of their output has also been able to boost prices for IT applications though the IT market remains weak, the sources said, adding that IT panel prices for August are set to increase slightly.
Article translated by Rodney Chan
