Although large-size IT and TV panels are seeing their recent quotes drop to cost levels, causing the related makers to reduce their utilization to minimize their losses, Taiwan-based panel maker AU Optronics AUO which has a LED TV panel penetration rate of about 40%, is still expected to see strong profits in the third quarter, according to the market watchers.
The market watchers pointed out that LCD monitor panel quotes have already dropped 5-20% since early this quarter with notebook and TV panel both dropping about 10-15%. With some IT panel quotes already reaching first-tier panel makers cash cost, while other TV panel quotes are close to first-tier panel maker's total costs, first-tier panel makers' profits have shrunk significantly with second-tier panel makers seeing losses.
Since the panel industry's average LED penetration rate is about 25%, AUO's high-than-average penetration rate is expected to help the company to remain profitable in the third quarter.
The sources also pointed out that several panel makers have already reduced the utilization rates of their 5G production lines for IT panels to below 50% and since their 6G, 7.5G and 8.5G lines are capable of producing TV panels, these lines' utilization rates are seeing a better status.
As for the future, the sources believe that large-size panel's quotes are unlikely to have space for a drop and with brand vendors expected to start restocking their inventory in the fourth quarter, Taiwan panel makers should start raising their utilization rates in October to prepare.
