Report: Big losses for advanced panel sector
November 2, 2022
By Chris Forrester
The ‘big three’ TV and smartphone panel makers have reported larger net losses for Q3 2022, and reflecting weak demand and lower prices for panels.
A report from Display Supply Chain Consultants (DSCC) looks in details at LG Display, AUO and Innolux, and says each of the three reported the “worst quarter in years”.
For LG Display the research says: “LGD results were down sharply in Q2. The company continued to reiterate its strategy to shift to OLED but will find it increasingly difficult to fund the required investments from LCD operations. Although increased sales of smartphone panels helped it record a revenue increase sequentially in Q3, LGD reported a net loss of KRW 774 billion (€582.2m) on revenues of KRW 6.8 trillion. In US dollars, revenues were up 14 per cent q-o-q but down 19 per cent y-o-y; the Korean won depreciated 6 per cent in the quarter and 13 per cent compared to Q3/21. LGD fell to an operating loss of KRW 759 billion, compared to a smaller operating loss in Q2/22 and an operating profit in Q3/21.”
For AUO, the DSCC report says: “In Q3/22, price declines and weaker demand decimated AUO’s results as the company fell to its worst net loss since at least 2012. AUO reported a net loss of TWD (New Taiwan Dollars) 10.5 billion (€348.1m) on revenue of TWD 47.7 billion. Q3 revenues, operating income, net income and EBITDA all fell far short of consensus expectations. Q3 Margins fell sequentially by a double-digit percentage for the second quarter in a row, falling by 13-21 per cent q-o-q as lower panel prices took a toll. Margins fell to their lowest point since at least 2012.”
Taiwan’s Innolux also fared badly having blamed the Ukraine-Russian conflict plus China’s epidemic lockdown, as well as inflation combining to affect panel demand and low panel prices.
“Innolux revenues decreased 20 per cent q-o-q and 53 percent y-o-y to TWD 48 billion ($1.6 billion), falling just short of analyst expectations of TWD 48.9 billion. Innolux’ operating loss of TWD 15.4 billion (-€1.6m) was much worse than analysts’ expectations Its net loss of TWD 12.7 billion was also much worse than analysts’ expectations of a loss of TWD 7.2 billion. Margins fell by 17-22 per cent across the board and have fallen 49-58 per cent from the record-high margins of Q2/21,” says DSCC.