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Innolux Cuts Shipping Forecast – Taipei Times

Factory utilization would be reduced by 50 to 70 percent, the company said, as it seeks to optimize its flat panel product portfolio.

  • By Lisa Wang / Staff Reporter

Flat-panel panel maker Innolux Corp (群創) yesterday lowered its shipment forecast for this quarter as soaring inflation hurts consumers’ purchasing power and limits inventory digestion, the company said. at an online investor conference.

He predicted shipments would fall about 12% this quarter from last quarter, compared to a flat forecast made last month.

While market conditions have barely improved, Innolux would reduce its plant utilization to around 50-70% this quarter, from 90% last quarter, in an effort to minimize downside risks, the company said. society.

Photo: Chen Mei-ying, Taipei Times

“It makes no sense to manufacture so many panels when selling prices have fallen below cost level and inventory digestion is slower than expected,” said Innolux President Jim Hung (洪進揚).

Innolux would allocate more capacity for high-value panel products so it can optimize its product portfolios, Hung said.

Innolux expects modest business growth in the fourth quarter, even though it is a peak season for the electronics industry due to back-to-school demand and end-of-year shopping sprees .

Innolux drifted into the red with losses of NT$4.74 billion ($158 million) in the second quarter, ending seven consecutive profitable quarters, according to company data.

The panel maker is pinning its hopes on power cuts in China’s Sichuan province earlier this week for a moderate rebound as insufficient power supply would halt panel manufacturing and reduce the glut, accelerating inventory digestion, said he declared.

In the best-case scenario, the power cuts would pave the way for a sharp recovery in the first quarter of next year after the Lunar New Year holiday sales, he said.

Company estimates power supply constraints would reduce panel production in China by 3.6-5%, equivalent to a monthly reduction of 2-3 million 32-inch panels, Innolux chairman said , James Yang (楊柱祥) to investors.

As authorities in Sichuan prioritize household power supplies over industrial users amid persistent high temperatures, Chinese panel makers have seen power supply drop to around 30% of their average consumption, Yang said.

“It wouldn’t be enough to keep the production lines running at all,” Yang said.

“If things move in a positive direction, we believe [the industry would hit] the bottom at the end of this year. We hope we will have a good start next year,” Yang said.

Innolux saw positive signs for the TV panel segment, citing better TV sales in China and the United States during annual promotions in June, while also having an optimistic view of the global laptop market as the COVID-19 pandemic has changed the lifestyles of people and work bosses.

Hybrid work, remote learning and entertainment are expected to keep global laptop shipments high at 200 million to 220 million units per year over the next few years, Yang said.

Innolux expects to keep its capital expenditure for this year unchanged at NT$26 billion.

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