Hon Hai, Quanta fast-track efforts in LCD TV market

Taipei, July 1, 2003 (CENS)--Information technology heavyweights Hon Hai Precision Ind. Co. Ltd. And Quanta Computer Inc. have stepped up efforts to tap the crystal display (LCD) TV market.

Quanta, a leading notebook PC maker plans to introduce several LCD TV models, including some entry-level (14- and 15-inch models) and some higher-end models (23-, 26- and 32-inch), in August or September this year. Quanta's thin film transistor (TFT)-LCD production arm Quanta Display Inc. said it would first roll out 42-inch LCD TV models after it completes construction of a seventh-generation LCD panel plant in Taiwan.

Hon Hai will tap the LCD TV market through two subsidiaries, Innolux Display Corp. (Hon Hai's LCD panel-production subsidiary) and Q-Run Technology Corp. (a barebone PC and game console maker). Q-Run will make both large LCD monitors and high resolution LCD TVs. The company also plans to sell its brand products in mainland China soon.

Quanta Display recently said that it would skip over sixth-generation panel production and jump directly into production of seventh-generation panels in cooperation with Sharp of Japan. Quanta Display said that it would invest about NT$50 billion (US$1.45 billion at US$1:NT$34.6) initially to construct the seventh-generation plant, which mainly will produce panels for LCD TVs.

Quanta Computer estimated that there would be booming demand for LCD TVs in the coming few years, especially in the United States, which will switch to digital TV system in 2006. Quanta said that the U.S. shift from analog to digital would generate huge opportunities for LCD TV makers on a level equal to the earlier transition from cathode-ray tube (CRT) monitors to LCD monitors.

Quanta Computer's affiliate Chenming Mold Industrial Corp. is also planning to jump into the LCD TV market. Chenming claimed that it would not necessarily buy panels from Quanta Display.

Q-Run is scheduled to expand its R&D team to develop higher value-added LCD TV products in the future.

Industry sources said that Q-Run plays a special role in the Hon Hai Group as the subsidiary controls many of Hon Hai's reinvestment projects. Under commission by Hon Hai, Q-Run has invested in group affiliates Innolux and Hoxtek (a motherboard maker), as well as Quanta Display and C.P. Technology Co., Ltd. (add-on card maker). Q-Run has produced notebook PCs for Compaq and Apple and last year it won orders to make Game Cube game consoles for Nintendo.

Innolux plans to invest NT$30 billion (US$867.1 million) to set up a fifth-generation LCD panel plant in Taiwan, which is scheduled to begin trial and mass production in the third and fourth quarter next year, respectively. Innolux said that it is scheduled to produce 50,000 substrates, or about 600,000 17-inch panels, per month in the initial stage. The company stressed that it would develop a market niche unique from that of Q-Run in the LCD TV market.