Wed, Oct 15, 2003 - Page 11 News List

Motorola picks HK flat panels

OUTPUT TO TRIPLE Proview International Holdings Ltd, based in Hong Kong, plans to increase its production capacity after it was chosen to make TV and computer panels

BLOOMBERG

Proview International Holdings Ltd (緯冠), which became one of the world's biggest makers of flat-panel computer monitors this year, plans to triple capacity after Motorola Inc. picked the Hong Kong company to help make liquid-crystal display panels for televisions and computers.

Proview will add a factory in Shenzhen, China, to raise its annual capacity of flat-panel displays, optical drives and traditional TV sets to 45 million units in three years, executive director Luffer Wong said in a phone interview.

Proview expects unit sales of LCD and cathode-ray tube TVs and monitors to rise by more than half for a second year.

Proview, whose clients include Japan's Fujitsu Ltd and Acer Inc, joins rivals such as AU Optronics Corp (友達光電) in seeking a bigger share of a US$23 billion flat-panel market. South Korea's Samsung Electronics Co and LG Philips LCD Co are the two leaders.

Proview was No. 6 with a 4.7 percent market share in the second quarter, according to researcher DisplaySearch.

"It will be hard for Motorola to go up against the Koreans on their own," Wong said from a trade show in Shenzhen.

"Motorola can take advantage of our low-cost manufacturing and distribution channels not only in China but also in Europe and the US," he said.

Worldwide sales of flat-panel displays will probably jump 42 percent to 97 million units this year, with revenue rising by about a third, according to Austin, Texas-based DisplaySearch.

Motorola, the world's second-largest maker of mobile phones, is the latest US company to announce plans to enter the flat-panel display market, joining computer makers Dell Inc and Hewlett-Packard Co.

Motorola, which produced its first TV set in the 1940s, sold the TV business in 1974 to focus on semiconductors, wireless equipment and handsets.

Under the Motorola agreement, Proview also will make plasma TVs, compact-disc and digital video-disc players and computer drives under the Motorola brand.

Proview will start distributing the goods in China this year, and in Europe and the US by next year, Wong said.

"China can be a promising market for Motorola, where the brand is already well known,'' said Vincent Koo, chief investment officer at Kingsway Fund Management Ltd, who doesn't own Proview shares.

"In other countries, especially in Europe, Motorola's brand has weakened in the past few years," he said.

Proview, which originally focused on making traditional televisions sets, entered the top 10 list of LCD-monitor makers in the first quarter.

The company expects to sell more than 9 million LCD and cathode-ray tube monitors for the financial year ending June 30 next year.

Samsung, the world's largest maker of LCD displays, had 16.8 percent of the monitor market in the second quarter, according to DisplaySearch.

"Whether this can be a growth driver for Proview remains to be seen," said Mona Chung, an analyst at Core Pacific-Yamaichi International (HK) Ltd.

"There are plenty of established players in the market," she said.

Proview posted sales of HK$3.36 billion (US$434 million) and net income of HK$73.3 million in the six months ended Dec. 31 last year.

Wong declined to forecast revenue and profit for the financial year ending June 30 next year.

Its new Shenzhen factory, scheduled for completion in two years' time, is located on a 250,000m2 plot in northeast Shenzhen. The company wouldn't say how much it will spend on the new plant.

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