Innolux Corp. and AU Optronics Corp., Taiwan’s biggest makers of liquid-crystal displays, slumped in Taipei trading after the Economic Daily reported Chinese television makers will reduce orders.
Innolux, the island’s biggest LCD maker, tumbled 6.9 percent to NT$15.55 at the close, the biggest drop since June 4. AU Optronics, the second largest, slid 6.7 percent to NT$12.5, the steepest decline since Oct. 26. Taiwan’s Taiex Index fell 0.1 percent
Order cuts from Chinese TV makers will push LCD makers to reduce production, the Economic Daily reported. Innolux spokesman Lin Chen-hui couldn’t be reached for comment when contacted by Bloomberg News, while Hsiao Yawen, spokeswoman for AU Optronics, declined to comment.
“Inventories started rising so the industry needs to cut prices severely which will hurt profitability throughout the supply chain,” Vincent Yu, a Taipei-based analyst at Jih Sun Financial Holdings Co., wrote in a note today. “In China, the problem is with an excess of 32-inch TV panels as the market is switching to larger sizes, and we see this order cut as being a special one-off event.”
Both Innolux and AU Optronics are expected to post net losses in the first quarter, according to data compiled by Bloomberg.