TFT-LCD Panel Makers Cut Output to Protect Prices

Taipei, July 1, 2011 (CENS)--To lower product inventory, AU Optronics Corp. (AUO), the second-largest thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer in Taiwan, recently cut glass purchases by 15% and plans to reduce capacity-utilization rate to about 80% in July, according to industry sources.

Chimei Innolux Corp., the largest TFT-LCD panel maker in Taiwan, and Korean counterparts Samsung and LG Display, also reportedly plan to cut production to protect panel prices.

High inventory levels in TFT-LCD panel distribution channels forced panel prices to hover low in June, so many major panel suppliers are trying to cut production as counter strategy.

Besides cutting glass purchase, according to industry sources, AUO is expected to lower capacity utilization rate to 80% in the third quarter, from about 85% currently, with Chimei Innolux also to reduce utilization rate from about 90% to 80%. Samsung and LGD have cut utilization rates in the second quarter, and are expected to further cut 5% in the third quarter.

AUO said production as well as parts purchases will be adjusted according to market conditions, and will present the third-quarter utilization rate at the third-quarter shareholder meeting.