AU Optronics (AUO) March and First Quarter 2011 Results

Lower-than-expected LCD TV panel prices dragged AU Optronic preliminary consolidated March 2011 revenues, which grew 32.7% M/M but declined 11.6% Y/Y to NT$35,947 million. First quarter revenues declined 9.1% Q/Q and 16.4% Y/Y to NT$93,230 million.

Most LCD manufacturers report shipments in units, but I believe this metric is almost useless without also disclosing average diagonal sizes for specific applications like desktop monitor, notebook PC, LCD TV, etc. Much more useful than unit shipments is area shipments in square meters, which is used by LG Display. Unfortunately, AUO and most others do not report area shipments or diagonal sizes specific to applications with unit shipments.

AUO shipped 16.77 million LCD panels, an increase of 37.2% M/M, in the month of March and for the first quarter shipped more than 28.4 million units, up 1.3% Q/Q and 4.3% Y/Y. Small/medium LCD panel shipments were down 17.8% Q/Q and 23.7% Y/Y to 43.49 million units.

A decline in small/medium LCD panel shipments is interesting since top-tier LCD manufacturers cannot build enough especially those that are part of the iPhone and iPad supply chains. If it is true that AUO will be supplying IPS LCDs for Apple’s iPad 2 then small/medium LCD panel shipments might increase, but only a little since AUO will be a second tier supplier in terms of quantity requirements. However, Daniel Lee (@danieltjlee) tweeted on March 31:

It couldn’t be true. Still patent issue is not solved and it would not be the exect IPS.

Lee works for LG Display so I believe he knows what he is talking about in regards to AUO. So it remains to be seen whether or not AUO will be part of the iPad 2 LCD supply chain and if patent issues are eventually solved allowing AUO to supply IPS panels to Apple there should be a small but solid impact on its small/medium LCD shipments thereafter.