Market Overview

The Taiwan LCD Market Is Getting Weaker

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Drexel Hamilton’s Brian J. White mentioned that Taiwan based panel makers AU Optronics Corp (ADR) (NYSE: AUO), HannStar Display Corp, Chung Hwa Picture Tubes LTD. and Innolux Corp have reported a weak performance for February.

The February performance of all these leading Taiwan based panel makers was much weaker than historical seasonality, analyst Brian White mentioned.

Sales Cycle For LCD Panel Monitor In Negative Territory For Eleventh Consecutive Month

Sales of companies included in the Taiwan LCD Panel Monitor declined 18 percent month-on-month and were weaker than the average decline of 4 percent month-on-month of February over the past ten years. “We continue to believe the combination of a weak LCD TV market and increased China-based panel competitors will weigh on the LCD industry in 2016,” White wrote.

While Innolux witnessed a 21 percent month-on-month decline in its February sales, AU Optronics recorded a 15 percent month-on-month decline in sales. The analyst maintained a Hold rating for AU Optronics

Sales of companies focusing on smaller form factor LCD panels and not TVs also declined on a month-on-month basis. Chung Hwa recorded an 18 percent decline in its February sales, while HannStar reported a 28 percent month-on-month decline.

“Assuming average seasonality in March, we estimate sales for our LCD Panel Monitor will fall by 21% QoQ in 1Q:16, the sharpest decline we have on record and much weaker than the average decline of 9% over the past nine years,” White stated.

Posted-In: Brian J. White Drexel HamiltonAnalyst Color


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