All Taiwan's top-5 TFT-LCD panel makers profitable in 2003

Dec 22, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Taipei, Dec. 22, 2003 (CENS)--Taiwan's top-five makers of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels are expected to score total earnings of about NT$22 billion (US$645.16 million at US$1: NT$34.1) this year.

The five panel suppliers are AU Optronics Corp. (AUO), Chunghwa Picture Tubes, Ltd. (CPT), Chi Mei Optoelectronics Corp. (CMO), HannStar Display Corp. and Quanta Display Inc.

Due to strong demand for panels this year and an over 20% price hike on such product since early this year, all the five companies post operating profits this year. Quanta recently adjusted its annual financial forecast, lowering its revenue goal to NT$27.1 billion (US$794.72 million) from the original NT$30.58 billion (US$896.77 million) but upgrading its profit goal to NT$150 million (US$4.4 million) from a loss of NT$2.5 billion (US$733.14 million).

According to Quanta, its profit margin neared 20% in October and the figure outstripped 20% last month due to the panel price rise and a better product mixture.

Industry sources said that since early 1993, when CPT entered mass production of large-sized panels, the profitability of the top-five panel makers has been unstable, with some enjoying profits and some suffering losses. Last year, for example, the sources said, only AUO and CMO were profitable and together made annual earnings of NT$8.3 billion (US$243.4 million).

The TFT-LCD panel market turned around this year with strong demand from LCD monitors, which are rising to replace the cathode-ray tube (CRT) counterparts and currently have a market share of over 40%, and from notebook PCs, which are in a booming period as consumers and enterprises are buying new models to weed out their old machines. The panel supply, however, has been tight since early this year due to the delay in the availability of additional capacity at panel makers' new fifth-generation panel plants, leading to continuos panel price hikes.

According to the sources, Quanta's fifth-generation panel plant started mass production in March this year, about the same time as AUO's, but the speed of production process shift at Quanta's new facility was slower than originally expected, affecting the smooth production. Quanta's fifth-generation panel facility, however, began providing normal production capacity only in October, causing the company's panel shipment volume to rise to 520,000 units in November, up 15.6% from the previous month.

With the smooth operation at its new panel plant, Quanta enjoyed the highest monthly output growth rate among all counterparts last month.
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