Shares in the nation's TFT-LCD panel makers toppled yesterday, pulled down by negative comments from market researchers and uncertainty in the US market. TFT-LCD panels are the screens in notebook PCs and on flat panel displays used with computers.
The bad news could not have come at a worse time for two companies that listed this week on the Taiwan Stock Exchange, Chi Mei Optoelectronics Corp (
Chi Mei, which listed with a selling price of NT$63 per share despite being valued at only around NT$45 per share on Taiwan's Emerging Market for IPOs, has seen its share price fall its 7 percent limit for the past three days. The stock ended trading yesterday at NT$51.5 per share, and analysts believe it has more room to fall.
Quanta Display listed shares yesterday on the exchange, but at a 26 percent discount to the NT$33.8 per share value they held on the Emerging Market. Shares opened yesterday at NT$25 per share, but quickly dropped 6.8 percent due to news the industry could remain in a slump for another month. It ended trading yesterday at NT$23.3 per share.
The US market research firm DisplaySearch said in a report that while the second quarter was a record for the TFT-LCD industry, third quarter "outlook is weak due to inventory concerns ... there are significant quantities of panel inventories," because many companies procured an excessive number of panels during the second quarter. The excess panels are still sitting in warehouses waiting to be used, and average selling prices are set to fall 2 percent this quarter as a result, the report said.
The news, coupled with negative comments about the entire electronics industry by Intel chief Craig Barrett yesterday, sent TFT-LCD panel makers in Taiwan down yesterday. AU Optronics Corp (友達光電), the nation's largest maker of the panels, dropped 1.8 percent to NT$27.5, while Chunghwa PictureTubes Ltd (中華映管) fell 2.3 percent to NT$17.3 per share and HannStar Display Corp (瀚宇彩晶) slid 5.6 percent to NT$18.7 per share.
Market pundits say the LCD low season is usually in July and August, and that orders usually pick up in September. Poor visibility on demand going forward, however, has dampened sentiment. DisplaySearch said that as many as 14 percent of the world's TFT-LCD production lines will be idled in the July through September quarter due to slowing demand.
The only note of optimism in recent news for the TFT-LCD industry has been reports that the head of Samsung Electronics Co, the number one producer of TFT-LCD panels, said sales in September should rise by 10 percent to 20 percent with average selling prices ticking up as well.
Chi Mei Optoelectronics forecast profits of NT$10.6 billion this year, or NT$5.98 per share. Quanta Display has not announced a profit estimate for the year, however the company reported earnings for the first six months of the year with net profits reaching NT$664 million, or NT$0.33 per share.
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