AU Optronics sees little reason for grim LCD outlook

* AU sees no reason for a gloomy outlook

* Prices have fallen a lot, consumers will still buy

By Baker Li

HSINCHU, Taiwan, March 19 (Reuters) - Taiwan's AU Optronics Corp (2409.TW), the world's third-largest LCD maker, said on Thursday it has little reason to be downbeat on this year's outlook, despite gloomier forecasts from its two bigger rivals.

AU Optronics' comments comes days after South Korea's Samsung Electronics (005930.KS) and LG Display (034220.KS), the world's top two makers of large LCDs, said they were bracing for a tough year and were cautious on any near-term recovery in the battered sector. [ID:nSP418938] "There is no reason to be pessimistic. Prices have fallen quite significantly from last year through this year so far," AU (AUO.N) Chief Executive Officer L.J. Chen said when asked by reporters at a company event about the outlook later this year.

"People feel that prices are quite low now. They will be cautious, but I don't think they will stop buying."

He did not specify whether he was referring to shipments or prices for his company, which posted a record loss for the October-December quarter.

Some of Taiwan's technology companies have been enjoying a spate of rush orders from China, where the government is pushing a programme to introduce more electronics goods to smaller cities.

Last week, AU's biggest local rival, Chi Mei Optoelectronics (3009.TW) forecast its LCD panel shipments would rise 20 percent this year with help from Chinese government policy to boost rural consumer spending on electronics [ID:nSHA248213]

Taiwan's top contract chipmakers, TSMC (2330.TW), also recently raised its first-quarter guidance due to rush orders from China. [ID:nTP219809]

In January, AU said it expected TV panel shipments and average selling prices to be roughly flat in the first quarter compared with the previous three months.

AU said its PC panel shipments will likely fall 20 percent in the first quarter from the fourth, but average selling prices would be slightly up.

Chen's comments came after the Taipei stock market closed on Thursday. AU shares rose 2.15 percent, outperforming the main TAIEX's 0.23 percent drop.

AU, Chi Mei and other smaller Taiwan firms supply most of their liquid crystal displays to top PC brands such as Dell (DELL.O) and Hewlett-Packard Co (HPQ.N) and some TV vendors in Japan and South Korea. (US$1=T$33.8) (Additional reporting by Argin Chang, Editing by Jacqueline Wong)