Global supply of liquid-crystal displays for televisions and monitors exceeded demand in the first quarter and the number of available screens will exceed sales for another two quarters, a market researcher said.
Supply of LCDs measuring at least 10 inches diagonally exceeded demand by 0.3 percent in the first quarter as sales dropped from a "busy" holiday season the previous quarter, Isuppli Corp said.
Sales fell 5 percent from the fourth quarter to 28.5 million units, it said.
Oversupply will be 6 percent in the second quarter and 5.4 percent in the third quarter before demand outpaces supply by 4.3 percent in the fourth quarter of this year, the researcher said.
Betting that more consumers and businesses will replace their bulkier glass tubes for flat screens, Samsung Electronics Co of South Korea budgeted 20 trillion won (US$17 billion) over a decade on an LCD complex in Asan, southwest of Seoul.
Seoul-based LG.Philips LCD Co, the world's No. 1 maker of liquid crystal displays, has said it will be the leading investor in a 25 trillion won LCD complex in South Korea.
AU Optronics Corp (友達光電), this country's largest maker of flat-panel displays used in computers and TVs, on Tuesday received government approval for an overseas share sale to build new factories.
AU Optronics plans to sell as many as 350 million shares, that may raise up to US$847 million. The company's fund raising will compete with LG.Philips LCD which plans to raise 2.3 trillion won in its first public share sale this year.
Both companies are building factories as demand for the screens may rise 43 percent this year to US$43.3 billion, and to US$68.8 billion by 2008, according to market researcher DisplaySearch.
LG.Philips and AU Optronics are attractive companies, according to King, who said he may take a stake in the South Korean manufacturer and owns shares in its smaller Taiwanese rival.
"Global investors will have to allocate money for the LG Philips sale," said Frank Wang, an analyst with Credit Suisse First Boston in Taipei. "There may be less money for Taiwan companies."
AU Optronics shares rose 1.5 percent to NT$68.5, while its smaller peer Chunghwa Picture Tubes Ltd (中華映管) gained 1 percent to NT$20.2 on the TAIEX.
Shares in LG.Philips LCD will start trading on exchanges in New York and Seoul on July 14.
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