AUO and TPO see Nokia orders driving small- to medium-size panel shipments, say sources

Demand for small- to medium-size LCD panels from the handset market is warming up, with major vendor Nokia increasing orders at AU Optronics (AUO) and TPO Displays, according to industry sources.

Orders from China's white-box handset vendors are also rising, benefiting such makers as AUO, Giantplus Technology and Innolux Display, the sources said.

While uncertainties still shroud the panel market in the third quarter, the handset segment is the first to show signs of a pick-up in demand, the sources commented.

Paul Peng, executive vice president of AUO, said the company's small- to medium-size panel inventory remains healthy, except for the digital camera and digital photo frame segments.

Peng said AUO is also seeing handset clients, including major international vendors, increase their orders. While the white-box handset market in China is said to have suffered from a government crackdown, the upcoming 2008 Beijing Olympic Games is prompting the white-box handset vendors to stocking up their inventory, which in turn is increasing demand for handset panels, Peng remarked.

AUO's small- to medium-size panel shipments in the second quarter totaled 41.88 million units, rising 11.1% sequentially and 29.9% on year. Revenues from the segment in the second quarter reached NT$10.8 billion (US$355 million), flat compared to the first quarter but up 30% on year.

Max Cheng, CFO of AUO, said the company's small- to medium-size panel shipments will grow 15% sequentially in the third quarter.