Taiwan TFT-LCD makers to supply 15.4" notebook PC panels to Dell, HP

Dec 12, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Taipei, Dec. 12, 2003 (CENS)—At least three Taiwan thin film transistor-liquid crystal display (TFT-LCD) panel makers are expected to supply 15.4-inch notebook PC-use panels to Dell Computer Corp. and Hewlett-Packard Co. (HP) of the United States.

The three local panel suppliers are AU Optronics Corp. (AUO), Chi Mei Optoelectronics Corp. (CMO) and Chunghwa Picture Tubes, Ltd. (CPT).

Industry sources said that Dell and HP turned to the three local panel suppliers for 15.4-inch notebook PC panels due mainly to a shortage in the supply of such products from its major suppliers, Samsung Electronics of South Korea and Hitachi of Japan. The increasing popularity of wide-screen notebook PC models has lead to a supply shortage of such display panels.

The sources pointed out that the 4.5th-generation panel plants are more suitable for producing 15.4-inch panels. CPT, AUO and CMO have all sent 15.4-inch panel samples to Dell and HP, and expect to begin supplying such panels to the two big customers early next year after passing relevant certification process.

In terms of 15-inch notebook PC panels, local HannStar Display Corp. has part of its capacity ordered by Dell, while both AUO and CMO's Japanese affiliate International Display Technology Inc. (IDT), a joint venture between CMO and IBM Japan, now ship such products to several big international brands.

CPT is scheduled to ship about two million notebook panels next year, with 15-inch and 15.4-inch panels each accounting for one million units. The company is expected to account for about one-sixth of the global supply of 15.4-inch panels next year.

Industry sources said that the 15.4-inch panel business is expected to help suppliers boost their operating profits. Currently, the unit price of a 15.4-inch notebook panel is about NT$260 to US$270, higher than US$240 for a 15-inch model.

According to local panel makers, Dell and HP have retrieved their parts procurement rights from contract assemblers recently. Dell used to divide its parts procurement system into four levels, including Dell's own procurement, contract assemblers' procurement from Dell-designated suppliers, contract assemblers' procurement from Dell-certified suppliers and contract assemblers' own procurement. Currently, about 75% of Dell's parts procurements belong to the first two levels.

They said the global sales volume of notebook PC is expected to reach a new high next year due to the lingering strong demand by general consumers and an expected hectic buying wave from enterprises. Eyeing the corporate procurement wave, Dell and HP are actively seeking new panel suppliers in Taiwan.

International Data Corp. (IDC) recently revised upward its original estimate of the 2004 global notebook PC sales volume to 50 million units from 43 million. The sales of such portable computing devices enjoyed a double-digit growth in the past few quarters.
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