The bottom line is what counts in the competitive flat-panel display industry, not how many thin-film transistor liquid-crystal display (TFT-LCD) panels each company can pump out, analysts said yesterday in response to a report from US researcher International Data Corp (IDC) that placed South Korea's Samsung Electronics Co ahead of rival LG Philips LCD Co in the number of panels each company shipped in the final three months of last year.
"It's not all about shipment quantities any more," said Wang Chien-erh (
Samsung surpassed LG in profitability last summer, he added.
IDC analyst Stanley Jeong said on Friday at a conference in Seoul that Samsung shipped 5.99 million panels last quarter, compared with LG's 5.95 million.
The latest fifth-generation (5G) of flat-panel production plants, or fabs, can cut six 15-inch panels for computer displays from one piece of motherglass, but only two 30-inch panels for flat-screen televisions, Wang said. Each new generation of fab produces larger sheets of glass from which more panels can be cut more efficiently.
But a 15-inch panel fetches only US$230 compared to US$1,200 for a 30-inch TV, making the larger screens much more profitable in smaller quantities.
"In the future, talk about panel shipments won't have much meaning," Wang said.
Another analyst agreed.
"Profitability is more important as it is needed for reinvestment," said Simon Tu (杜立生), an analyst at SinoPac Securities Corp (建華證券).
As Taiwanese TFT-LCD panel manufacturers compete with their larger rivals in South Korea, keeping up with the latest technology is critical.
"This is the best year for Taiwan's TFT-LCD makers to challenge their Korean rivals," Tu said.
Taiwan's largest TFT-LCD panel maker, AU Optronics Corp (
Earlier this month, the company announced plans to invest NT$85 billion in new fabs and equipment this year. The company's sixth-generation, or 6G, fab is expected to start production early next year. AU rival Chi Mei Optoelectronics Corp (奇美電子) has announced plans to jump to the next generation and is constructing two 7G production lines.
The Taiwanese need to work fast, as the Koreans are already ramping up their 6G production, as is the only remaining Japanese player, Sharp Corp. Samsung is expected to launch a 7G fab later this year.
Smaller Taiwanese rivals HannStar Display Corp (
Chunghwa Picture Tubes Ltd (
The combined production of the Taiwanese could surpass the Koreans by the end of this year, Tu said.
"With all the 5G lines coming on-line, overall, Taiwan's TFT-LCD total shipments could surpass the Koreans this year."
The Taiwanese have been carefully cutting costs to make sure those shipments are reflected in their bottom lines, DisplaySearch's Wang said. "The Taiwanese have become more efficient, and soon their profitability will challenge the Koreans."
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