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Demand for LCD monitors rises

"With an increasing number of vendors providing LCD monitors as standard equipment on PCs, demand is skyrocketing."

Victor Tsan, managing director of the Market Intelligence Center

The manufacturing of LCD (liquid crystal display) monitors is expected to be the most prosperous sector in Taiwan's information-technology-hardware industry this year, a government-funded think tank said yesterday.

"We estimated the production value of the nation's LCD-monitor sector will reach US$6.3 billion this year -- that's about a 100 percent increase over last year," Victor Tsan (詹文男), managing director of the Market Intelligence Center (市場情報中心) under the Institute for Information Industry, said yesterday.

Tsan was commenting to the press on the center's quarterly report on Taiwan's IT-hardware production for the first quarter.

During the first three months this year, the LCD-monitor sector posted the highest growth rate in the IT production market, a 188 percent jump in production value over the same period last year, Tsan said.

"With an increasing number of vendors providing LCD monitors as standard equipment on PCs, demand is skyrocketing," Tsan said

During the second half of last year, several Japanese companies stopped manufacturing [LCD monitors] because of concerns over high production costs, he said.

"They then began to outsource production," Tsan said.

Taiwan's LCD monitor manufacturers, such as Chi Mei Optoelectronics Corp (奇美光電), Au Optronics Corp (友達光電), Chunghwa Picture Tubes Ltd (中華映管), and HannStar Display Corp (瀚宇彩晶) have all received a growing number of orders from Japan this year.

But competition from South Korean companies may be on the increase.

"Last year, Taiwan churned out about 9.28 million LCD monitors and controlled 58.6 percent share in global market," center analyst Sean Wu (吳翔) said. "That share, however, has slipped to 54.1 percent in the first quarter of this year."

Most of the lost market share has been taken by South Korean manufactures, Wu said.

Currently, most Taiwan-based LCD-monitor makers specialize in producing 15-inch monitors, while their South Korean counterparts focus more on 17-inch models.

"Since the profit margin for 15-inch monitors is limited and the product may soon be replaced by more sophisticated units, local makers should now target 17-inch or 20-inch monitor production as soon as possible," he said.

Tsan said the nation's IT-hardware sector is mostly rebounding. Overall, Taiwan reported US$10.6 billion IT-hardware-production value in the first quarter of this year -- a 23.7 percent increase over the same period last year.

The center forecasts that by the end of this year, the IT industry's annual production value will reach US$44 billion -- a 17.5 percent increase over last year, with PC-peripheral products becoming a core business.

"LCD monitors, DVD-ROMs, CD-RWs and digital still cameras will play a more important role this year than PCs or motherboards in contributing to Taiwan's IT industry," he said

As the nation's market share of notebook PCs, desktop PCs and motherboards have been stable for years, new sectors still have a lot of room to grow, he said.
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