Innolux, AUO Win Big-ticket New Orders for Value-added Panels

Innolux Display Corp. and AU Optronics Corp. (AUO), Taiwan's top two makers of thin film transistor-luquid crystal display (TFT-LCD) panels, both recently announced the receipt of new big-ticket orders.

Innolux received orders for 4K2K, or UHD (Ultra High Definition), TV panels from Samsung (50-inch) and Sony (65- and 75-inch), and the company hopes that this will help its 4K2K TV panel shipments grow by a factor of five. Samsung unveiled a new series of curved TVs at CES 2014, implying an intention to switch from organic light-emitting diodes (OLEDs) to curved LCDs.

Paul Gagnon, an analyst with NPD DisplaySearch, has pointed out that LCD TVs have achieved a penetration rate of 96%, and that OLED TVs are not expected to enjoy any clear increase over next two or three years. So, he said, 4K2K will be the market mainstream in the coming two years.

Both Innolux and AUO have pulled ahead their Korean rivals in big-volume shipments of 4K2K TV panels, and their revenues and profits are expected to show further improvements this year.

As the world's leading supplier of 4K2K TV panels in 2013, Innolux has this year extended its customer pool from major Chinese color-TV vendors to Japanese brands . The company is targeting shipments of more than 12 million such panels in 2014, an increase of 500% over last year.

AUO, the pioneer in the promotion of curved LCD TV panels, began shipping 65-inch panels to Japan's Sony and China's Changhong in 2013. The company recently won orders for curved panels from Samsung, the world's largest TV vendor, as well as from white-brand home-appliance makers in China, keeping its production lines fully occupied.

With its improved yield rate and growing ratio of higher unit-price products (such as 4K2K panels) in its shipments, industry sources said, AUO is expected to be profitable in the first quarter of this year, confounding predictions by foreign institutional investors that its operations would be in the red.

A senior official of the market research firm WitsView Technology Corp. pointed out that first-quarter TV panel prices are still above the overall costs of panel suppliers, and that the upgrading of equipment at the seventh- and eighth-generation (7G and 8G) factories of Taiwanese suppliers is expected to help cut cost and enhance profitability.

NPD DisplaySerach said that the curved TV is a possible future trend. Samsung unveiled its curved TVs at the CES 2014, implying the company's intention to turn its head from OLED to curved LCD.