Hon Hai, Wistron to Benefit From Production Cut by Sony of Japan

Taipei, March 24, 2011 (CENS)--Taiwan's leading electronics contract manufacturers, including Hon Hai Precision Industry Co. and Wistron Corp., are expected to share the orders for 30 million LCD (liquid crystal display) TVs released from Sony Corp. which has announced production cut in the wake of the devastating 9.0-magnitude earthquake in northeastern Japan.

Sony said it is overhauling plants damaged by the strong earthquake, leading to a cut in production of blu-ray discs, optoelectronics components, semiconductor laser readout devices and lithium batteries.

Other products facing temporary production suspension include blu-ray burners, digital still cameras, cellphones and LCD TVs. It is expected the above-mentioned consumer electronics won't resume normal production until the end of March.

Sony noted it would use existing inventories to maintain a steady supply. Accordingly, Taiwan won't see supply shortage from Sony till the end of the second quarter of this year. The Japanese big name is also considering moving part of production capacities overseas once it feels a shortfall in sourcing key raw materials and components to facilitate production.

In fact, over the past two years Sony has been releasing contract orders to foreign contract manufacturers to sustain profitability. At present, Hon Hai and Wistron together swallow over 75% of the LCD TV orders released by Sony which retains less than 20% production capacity only.

It is expected Sony will procure 15 million LCD TV panels from Taiwan this year, of which Chi Mei will account for 27% and AU Optronics 14%.