CMO sells Japanese subsidiary IDT to Sony for 18.5 billion yen

Taipei, April 4, 2005 (CENS)--Taiwan's Chi Mei Optoelectronics Corp. (CMO)has completed sales of its Japanese subsidiary, the International Display Technology Inc. (IDT) to Sony Corp. of Japan for 18.5 billion yen.

Institutional investors estimated that the deal is expected to contribute earnings of at least NT$1 billion (US$31.75 million at US$1: NT$31.5) to CMO to help cut the Taiwan panel maker's operating losses in the first quarter. CMO is currently the Taiwan's No. 2 maker of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels.

Industry sources said that the fall of TFT-LCD panel prices seen since the second half of last year have effectively stimulated the downstream demand and boosted panel makers' shipment in the first quarter this year. Institutional investors, however, are still carefully observing whether panel makers' losses in the first quarter will drop from the fourth quarter of last year, as the panel prices have fallen under their manufacturing costs.

Some institutional investors said that the profits generated from the IDT deal and CMO's efforts in cutting material costs are expected to greatly improve the firm's profit margin in the first quarter.

The investors pointed out that the shipment volumes of the top-five panel makers in Taiwan in the first quarter are expected to grow from one quarter earlier, while the panel prices already stopped declining in February. So, they estimated the makers to see operating losses shrink significantly.