Dell, Hewlett-Packard to sell flat TVs, suppliers say

Some investors questioned how much price cuts will stimulate demand, given the price gap with conventional models.

A Sharp 20-inch liquid-crystal display TV sells for US$2,000, compared with US$200 for a same-sized Toshiba cathode ray tube model, according to the Web site of Costco Wholesale Corp.

Flat-screen models will account for about 2 percent of all TVs sold worldwide this year, rising to 16 percent by 2007, DisplaySearch forecasts.

Supply shortages may force Dell and Hewlett-Packard to delay their plans. New plants being built by Taiwanese manufacturers have yet to come into full production.

AU Optronics Corp (友達光電), the world's fourth-largest flat-panel maker, said that TV screens accounted for 1.3 percent of its sales in the second quarter.

Sales prediction

Taiwan's second-largest screen supplier, Chi Mei Optoelectronics Corp (奇美電子), said TV panels will account for about 20 percent of sales in the second half. No. 3 Chunghwa Picture Tubes Ltd (中華映管) said it has more orders than it can meet this year.

Investors said Dell and Hewlett-Packard's entry would be positive for Taiwanese manufacturers, which make many of the desktop and notebook PCs sold under the US companies' brand names.

"The Taiwanese companies have nothing to lose," said Pedro Tai, who counts shares in Taiwan flat-panel makers among the US$200 million he helps invest for ABN Amro Asset Management Taiwan.

"If Dell and Hewlett-Packard can open this new market, it would allow Taiwan's PC companies to enter the consumer-electronics business."