AU Optronics (AUO) Q2’08 Revenues Decline 9.6% Q/Q

AU Optronics (AUO) is Taiwan’s largest LCD manufacturer and the world’s third largest. AUO released Q2’08 results on July 24, 2008. Here are the details:

  • Revenues: Down 9.6% Q/Q to NT$123.48 billion
  • Net Income: Down 24.4% Q/Q and up 245% Y/Y to NT$20.4 billion
  • Gross Margin: 25.0% down from 27.1%
  • Operating Margin: 19.5% down from 22.2%
  • Shipments:
  • Large-Area: Down 0.8% Q/Q but up 12% Y/Y to 21.85 million units
    Small/Medium: Up 11.1% Q/Q and 29.9% Y/Y to 41.88 million units

  • Inventory: 40 days

Analysis after the jump.

AUO’s gross and operating margins compressed 2.1 and 2.7 points, respectively in Q2’08. In my opinion, margins will continue to compress as large LCD TV panel prices are collapsing on a biweekly basis due to swelling inventory and declining demand. Net income decreased a significant 24.4% Q/Q in Q2’08. Future investments towards capacity are centered around a larger G8.5 TFT LCD fab to build even larger LCD TV panels and more of smaller sizes on a single motherglass. However, with today’s shift toward smaller and more affordable LCD TVs and the future unclear, it is a risky multi-billion dollar bet for AUO.

Source: AUO

[tags]AU Optronics, AUO, Display Manufacturer, LCD Manufacturer, G8.5, LCD TV, AUO Q2’08 Results[/tags]

Leave a Reply