AUO and Innolux Expect Strong First Half Amid Supply Chain Disruptions

AUO Chairman Peng Shuang-lang stated that the first quarter saw strong demand for TV panels, boosted by the World Cup, coupled with memory chip shortages leading to client pre-orders. He noted that the US-Iran conflict has been the most significant factor, with its fluctuating nature impacting markets, evidenced by the stock market's significant rally following the temporary de-escalation. Peng believes the conflict will eventually be contained, and the key concern will be the return of energy prices to normal levels. He highlighted the vulnerability of global energy supply chains, particularly concerning the Strait of Hormuz, and sees potential reconstruction opportunities post-conflict. Innolux Vice Chairman Hong Jinyang added that factors beyond war, such as rising memory chip costs, are prompting clients to stock up early, leading to better-than-expected orders for the first half of the year. He anticipates similar demand for consumer electronics in both Q1 and Q2. Regarding the impact of rising memory costs on end markets, Hong suggested it might have a moderate effect on laptops and a slightly larger impact on smartphones, while the cost increase for TVs and monitors is expected to be below 3%.