Hitachi Farms Out Flat TV Production to Taiwan's Contract Suppliers

Taipei, April 21, 2009 (CENS)--To achieve cost efficiency, Japan-based Hitachi Ltd., a globally leading brand of household appliances, has decided to shut down production lines of flat TVs in the Czech Public and Malaysia, and farm out the production to its Taiwanese contract suppliers, namely Tatung Co. and Compal Electronics Inc., according to Japanese news agencies.

Due to appreciation of the Japanese yen, which has significantly eroded the competitiveness of Japanese brands in the global market for consumer electronics over the past months, Hitachi is increasingly willing to source flat TVs from foreign contract suppliers instead of manufacturing in-house.

Accordingly, Hitachi has already contracted its Taiwanese and Turkish suppliers to produce its low-end 20-inch and 32-inch flat TVs, with Taiwanese suppliers to handle a third of the total for sale this year. Instead, the brand will focus on production of its high-end UT (ultra thin) series models.

Having supplied plasma TVs to Hitachi for some time and actively diversified its production into LCD (liquid crystal display) TVs in recent years, Compal is very likely to land contract orders from the Japanese client for the products. Compal shipped 2 million LCD TVs last year and plans to boost the figure to between 3.4 million and 3.8 million units this year.

In the meantime, Tatung has cooperated with Hitachi on production of LCD TVs for several years, and will also benefit from the brand's move to increasingly farm out production of 32-inch LCD TVs. This year, the company is expected to maintain its overall LCD TV shipment at one million units amid the global consumer demand slowdown and economic fallout.

Besides, Hitachi will hopefully increase its purchases from Taiwanese suppliers this year, with the budget for LCD TVs to significantly grow. In 2008, the brand spent US$100 million souring LCD TVs, projectors, semiconductors, LCD panels for industrial use and PCB (printed circuit boards) from Taiwanese makers.

LCD TV Shipment Goals of Taiwanese Suppliers for 2009
Company	Shipment for 2008	Shipment for 2009
TPV Technology Ltd.	5.9 million units	9 million units
AmTran Technology Co., Ltd.	2.5 million units	4.5 million units
Compal Electronics Inc.	1.8 million units	4.0 million units
Wistron Corp.	1.7 million units	2.5 million units
Tatung Co.	0.5 million units	1.2 million units
Proview Technology Inc.	2.3 million units	1.0 million units
Innolux Display Corp.	0.9 million units	0.8 million units
Jean Co.	0.4 million units	0.5 million units

Source: DisplaySearch