An executive at the Chi Mei Optoelectronics Corp (
"So far we have seen a 25 percent price increase" in standard 15-inch LCD panels, said Jeff Hsu, vice president at Chi Mei, at Merrill Lynch's 5th Annual Asia Pacific Technology Conference in Taipei yesterday, adding that the steep price rise has not dampened consumer enthusiasm.
Chi Mei is one of the nation's top four TFT-LCD panel makers, along with Au Optronics Corp (
Sales of TFT-LCD screens began to take off late last year as falling prices prompted consumers to make the switch to the flat computer displays.
The price of an LCD monitor has dropped to about double that of older, more traditional CRT monitors.
Even computer retail giants like Dell Computer Corp and Compaq Computer Corp have been bundling LCD displays with new computers.
Rising demand, in turn, has sparked price increases by TFT-LCD flat-panel suppliers, boosting local producers.
The price per unit for TFT-LCD panels has risen to US$250, and "we think an additional US$20 to US$30 increase is possible," Hsu said.
Chi Mei is projected to end this year as the third largest TFT-LCD flat-panel maker. It plans to list on the local bourse in order to help pay for a new, state-of-the-art "fifth generation" TFT-LCD production facility.
The new US$1.5 billion facility is already under construction. The fifth generation production process is expected to cut costs by making the glass plates from which the screens are cut much larger.
The Big Four:
•Samsung (S. Korea) -- 17.7 percent
•LG.Philips (S. Korea) -- 16.5 percent
•Chi-Mei Optoelectronics (Taiwan) -- 13.8 percent
•AU Optronics (Taiwan) -- 11.1 percent
How the rest stack up:
•Chunghwa Picture Tube (Taiwan) -- 7.3 percent
•Hannstar (Taiwan) -- 5.2 percent
•Quanta Display (Taiwan) -- 1.9 percent
•Other -- 26.5 percent
SOURCE: DISPLAY SEARCH
The company's Taiwanese competitors have announced plans to build such plants, and industry leaders Samsung Electronics Co and LG.Philips LCD Co have them up and running.
The design for Chi Mei's fifth generation plant will be based on a design that International Business Machines Corp planned to use in Singapore.
IBM sold its Japanese subsidiary TFT-LCD producer to Chi Mei late last year, and the plans for the fifth generation plant were included in that deal.
Chi Mei is building the new plant in the Tainan Science-based Industrial Park (
The company also believes its acquisition of IBM-Japan -- in which Chi Mei purchased at an 85 percent stake -- will push it into the top of the industry.
The new Japanese plant, renamed IDTech, increases Chi Mei's production by around 3 million units per year. This year, the company believes it will produce between 7.7 million to 8 million units in all.
IBM retained a 15 percent stake in IDTech, and took a 1.8 percent stake in Chi Mei itself.
The deal gives Chi Mei a strong technology partner for fifth generation technology and beyond. Chi Mei will also produce TFT-LCD panels for IBM on a contract basis.
"IBM is our investor, our customer, and they are our technology partner as well," Hsu said. Japanese electronics powerhouse Fujitsu is Chi Mei's other technology partner.
The top two TFT-LCD panel makers in the world currently are Samsung and LG.Philips, while Taiwan's AU Optronics is ranked third, according to the market research group DisplaySearch.
Chi Mei is currently the eighth largest TFT-LCD panel maker.