Cheng Mei Materials Technology (CMMT) expects its polarizer shipments to fall in June and July as panel suppliers cut production.
The drop in shipments in June will be smaller than in July, the polarizer maker said, adding that its shipments will likely see a sequential drop of nearly 20% in July.
The CMMT is uncertain whether shipments will fall further in August, as it still takes time to observe the progress of inventory adjustments among panel customers, the Taiwanese company said.
Brand sellers are slowing their pace of orders, prompting panel makers to control their production. CMMT also saw its capacity utilization rates fall by 80-90% in April and May, the company said. The polarizer supplier has also placed more emphasis on high-value products, such as those for automotive applications and AR/VR devices, to support its margin performance, he continued.
CMMT expects sales of its high-margin products to grow as a proportion of company revenue to 20% in 2023, from nearly 10% currently.
Recent downturns in TVs and other consumer devices are driving down demand for related panels, with LCD panel vendors cutting production sharply in the third quarter, industry sources say.
In addition, rising raw material costs and a depreciating Japanese yen cast a further shadow on the sales outlook of polarizing Taiwan-based companies for the rest of the year, the sources said.