Electronics firms seen winning LCD TV war

Local electronics manufacturers are expected to hold the upper hand over television makers in the liquid-crystal-display (LCD) TV industry, due to better cost control and sufficient panel supply, industry analysts said yesterday.

The question was asked whether electronics makers or TV makers would be able to win more orders when both sides started expanding aggressively last year.

"I'll bet on electronic companies," said Ken Ko (柯維華), an analyst at market researcher Topology Research Institute (拓墣產業研究所).

Strict cost management and the ability to supply massive volume will give an advantage to electronics manufacturers to meet the world's voracious appetite for LCD TVs by 2006, Ko said in the institute's latest report, released yesterday.

According to Topology's projection, the global demand for LCD TVs will soar to around 30 million sets by 2006. This year the demand will be about 10 million sets, double that of last year, the market researcher predicted.

Steven Tseng (曾續良), an analyst at Yuanta Core Pacific Securities (元大京華), agreed with Ko's view that the nation's TV vendors had been weak in combating their international rivals under the government's protectionist policy.

"Electronics makers have high hopes of repeating their success in the computer area," Tseng said. "Because the lucrative part will be providing original design manufacturing [ODM] services rather than brand business, to which Taiwan's TV makers still hold on to."

To vie for ODM orders, global logistics and inventory management will be a challenge for local TV brands such as Sampo Corp (聲寶) and Tatung Co (大同), Tseng added.

Sampo and Teco Electric & Machinery Co (東元電機), the country's two biggest TV brands, outpaced their electronics rivals by rolling out 26-inch to 32-inch sets in the third quarter of last year, a mainstream size for living rooms, according to the report.

In the meanwhile, consumer electronics maker BenQ Corp (明基電通) and computer monitor maker Amtram Technology Co (瑞軒) were scheduled to unveil 30-inch sets during the April-June period, about a one-year lag, Ko said.

"But the situation could reverse in the second half of 2005 ahead of the emergence of a jump in demand," Ko said. "By then, electronics companies will be able to catch up in technology."

Besides, the supply of flat panels will also be a key factor in determining who will be the winners, he said.

With sufficient supply within their groups, Quanta Computer Inc (廣達電腦), NextGen Mediatech Inc (新視代), BenQ and Q-Run Technology Corp (華升) will likely be the future stars in the LCD TV sector, Ko said.

Quanta now supplies Gateway Inc, Dell Inc and Panasonic with LCD TVs among other vendors and it expects to ship around 400,000 sets this year, Ko added.

However, he warned that small electronics makers, which switched to the emerging LCD TV industry for a new growth area, could be forced out of the market ahead of 2006 when demand takes off.