[March 8th, 2021]
This is a tracking exercise. The TFT-LCD or display business has been lousy for many years. It has been cyclical and driven by demand-supply dynamics.
The management is optimistic about the future believing there’s an industry-level structural change. Few factors contribute to that idea including more demand from various verticals (behavior change triggered by pandemic, auto…), potential exits of some players, less Chinese government subsidy and more disciplined investment among players… The stock price has trended up in tandem with surging quotation and actual ASP (later reflected in financials). There are few risks including wide spread component shortage, labor shortage, water shortage…(and of course demand decline and/or supply catch up). This business still doesn’t have pricing power and its scalability is ultimately constrained just like typical commodity business. (software is such a great business)
This post series is to track whether this time is different for AUO (still cyclical but shift upward).
The company will report Feb. 2021 sales on March 9th, 2021. I guess Feb. 2021 sales to be NTD 23B.
The 1Q21 guidance from AUO :
– Area shipment to be down by high single digit % QoQ, affected by less working days and tight supply of key components
– Blended ASP (USD/square meter) to be up by high single digit % QoQ, driven by strong momentum from TV and IT applications
– Loading rates to be maintained at high levels
Future numbers in charts below are my guesses.