AU Optronics (AUO) expects to continue to see losses in the first quarter of 2011, but the extent will be less significant as prices for large-size panels will start to increase in March, according to Paul Peng, executive vice president of AUO.

Acting president of AU Optronics (AUO), Max Cheng indicated that prices for IT (notebook and monitor) panels stabilized in the fourth quarter of 2010 but TV panel prices dropped 20% in two months, further causing AUO's performance in the quarter to be worse-than-expected.

Looking into the first quarter of 2011, AUO believes that despite the first quarter being the weak season, TV panel shipments will remain flat or drop slightly while IT panel shipments will increase slightly due to its alliance with clients. ASPs for TV panels will remain flat while IT panels will increase slightly due to better product mix.

For small- to medium-size panels, shipments are expected to drop slightly on quarter due to seasonality. Utilization rates for the quarter are estimated to stay at around 85% due to the Lunar New Year holiday and fewer work days in February.