AUO Cuts LCD Shipment Forecast

Facts: AUO cut its shipment forecast growth in Q2 from a 20% increase down to less than a 10% increase. Hsiung Hui, EVP at AUO stated that panel prices for all product segments will decline faster than expected during Q2. AUO's stock fell 6.2% to NT$42.20 at 11:16am June 7, the largest decline in 6 months; YTD, AUO's stock is down 14%. May sales fell 10% to NT$20.1 billion from April. Fab utilization dropped to 90% from a projected 95%.

Opinion: Inventories are high and prices are low. Even LPL, one of the largest LCD suppliers, is correcting its production due to these factors. The consumers are the winners: lower prices at stores. So wait a few more months and go out and buy that 20" LCD monitor you've been wanting for a while because most likely than not, the price will be pretty good.

Source: Bloomberg

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