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Taiwanese Flat Panel Industry Suffers Rough Q318
October 15, 2018

In Q318, all of Taiwan’s panel makers again felt the effect of continued lower large area ASPs and the increasing penetration of OLEDs in the smartphone market. The major suppliers, AUO, Innolux, GiantPlus, HannStar and CPT were all down Y/Y in revenues in Q318. Most were also down sequentially in September, which is usually the high month of the quarter.

• GiantPlus Technology’s revenues declined 0.46% on month and 20.26% on year in September. Third-quarter revenues came to NT$2.618 billion, decreasing 1.02% sequentially. For the first three quarters of 2018, revenues totaled NT$7.767 billion, declining 17.66% Y/Y.
• Innolux posted revenues of NT$24.4 billion (US$784.22 million) for September, which were flat sequentially, but down 9.5% Y/Y. Innolux's shipments of large-size panels in the month totaled 11.03 million units, down 0.2% sequentially; those of small- to medium-size panels reached 22.36 million units, down 9.9% sequentially.  Third-quarter revenues were NT$73.9 billion, up 11.2% sequentially, but down 7% Y/Y. Total shipments of large-size panels in the quarter were up 3.5% on quarter to 33.12 million units, and small- to medium size panels were up 9.3% to 74.6 million units.
• HannStar Display saw its revenues dip 13.1% sequentially and 45.9% Y/Y to NT$1.153 billion in September, as shipments of its small- to medium-size panels dropped 3.2% sequentially to 34.43 million units in the month. Shipments of monitor panels and own-brand large-size products increased 19.2% on month to 176,000 units in September, HannStar said. HannStar's third-quarter revenues came to NT$4.102 billion, down 38.39% Y/Y.
• Chunghwa Picture Tubes’ September revenues dropped 14.5% sequentially and 41.6% Y/Y to NT$1.922 billion (US$62.06 million) in September due to a lack of new products for the smartphone segment. The revenues dropped despite increases in unit shipments in September: large-size LCD panels increased 165.5% sequentially to 192,000 units, while those of small- and medium-size applications rose 78% to 30.45 million units. Demand for of older-generation panels from handset makers were weak in September, as CPT is set to begin shipping profile-cut panels for smartphone applications in early October, according to industry sources.
• AU Optronics (AUO)reported September sales of NT$27.44b, down 1.3% sequentially and down 5.6% Y/Y.  Historically, September has averaged up 1.3% sequentially and down 6.5% Y/Y (3 yr. averages), so the month was not far off from the averages.  Q318 total sales were NT$ 81.04b, ~2.6% above consensus and were up 8.0% sequentially but down 7.3% Y/Y. Shipments of large panels for September were 9.96m units down 0.8% sequentially and down 2.6% Y/Y, while small panel shipments were 13.07m units, down 6.3% sequentially and 20.0% Y/Y.  For the 3rdquarter, large panel shipments were 29.8m up 6.5% sequentially (slightly above 3 yr. average of 5.7%) and up 2.4% Y/Y (better than 3 yr. average of flat), while small panel shipments were 42.56m, down 6.1% sequentially (way below 3 yr. average of 4.0%) and down 9.1% Y/Y (way below 3 yr. average of 0.7%), but variations in 3Q shipment results, particularly with small panel products, can be quite volatile with Y/Y spreads over 40%.