AU Optronics (AUO) has released a profit warning for the third quarter of 2010.
It said financial performance for this quarter will be lower than the second quarter’s because of significant decreases in LCD panel prices.
Declines in panel prices will affect its gross margin, and AU expects third-quarter results to be significantly lower than those of Q2.
According to Goksen Sertler, a display analyst at Meko, AU isn’t the only one which will suffer in the third quarter.
She told TechEye: “LED panel prices are declining and this is why AUO are claiming their revenue will decline.
“The reason for low Q3 sales could be put down to a number of reasons. Firstly panel makers saw a good Q2 because of the high demand in Europe for LCDs as a result of consumers purchasing televisions because of the World Cup.
“If AUO is looking at its Europe figures than this could be why Q3 figures will be lower.”
She also said panel makers were under increasing pressure to lower their margins as television makers lowered prices – in a bid to get rid of televisions and make them more attractive to consumers.
“Panel makers can’t keep their prices high with pressure from the manufacturers,” she said.
However, she also pointed out that new, cheaper technology was coming into the market meaning panel makers had to lower costs.
AU Optronics has announced plans to issue euro convertible bonds (ECBs) worth $800 million for equipment purchase. It is expected to hold an investors conference for the third quarter on October 27.