Sat, Dec 11, 2004 - Page 11 News List

Drop in flat-panel prices to end, AU Optronics says

LEVELING OUT The plummeting prices for flat panel displays brought on by a competitive market this year will stabilize as demand increases, industry officials say

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AU Optronics Corp (友達光電), the world's third-largest maker of flat-panel displays used in computers and televisions, expects the decline in screen prices that began earlier this year to come to an end as demand rebounds.

Prices "are stabilizing," Lee Kun-yao (李焜耀), AU Optronics' chairman said in an interview on Wednesday in Taipei. He declined to say when the price decline will stop.

Flat-screen prices have tumbled by more than a third since June, paring 18 months of gains for a US$36 billion industry dominated by South Korea's Samsung Electronics Co. Hsinchu, Taiwan-based AU Optronics and larger rivals added to excess production capacity this year to meet expected demand for liquid-crystal display TVs measuring 32 inches diagonally and larger.

"Demand might explode next year," said Michael Ding (丁予嘉), president of Fubon Asset Management Co (富邦投顧). "LCD TVs are still going to have a chance."

AU Optronics shares rose 1.2 percent to NT$41.50 in Taipei. The benchmark TAIEX fell 0.04 percent to 5,911.63.

The comments from AU Optronics's Lee reinforce the view spreading among some industry executives that flat-screen prices are beginning to stabilize.

Chunghwa Picture Tubes Ltd (中華映管), Taiwan's No. 3 flat-panel maker, said on Sept. 30 it expected an end to the price decline as demand improved. Executives from Samsung Electronics Co, the world's biggest maker of flat panels, made similar comments in a presentation on Dec. 2, saying the drop will slow this year.

Samsung Electronics expects LCD TV shipments to rise 77 percent to 16 million units next year from 9 million this year, it said. Austin, Texas-based market researcher DisplaySearch Corp earlier this year forecasted LCD TV shipments would more than double to 12 million units from a year ago.

The decline in LCD prices will continue in the first two weeks of December, according to WitsView Technology Corp (聯景科技).

The price of a desktop monitor screen measuring 15 inches diagonally will fall to US$140 from US$155 a month ago, Taipei-based WitsView said on its Web site on Dec. 7. The price of a 17-inch screen will drop to US$160 from US$170, it said.

"We can view US$150 for a 17-inch screen as the bottom," said Timothy Chen (陳建光), an analyst with CLSA Taiwan, who said he expects the price slide to end this month.

Screen buyers will probably cut inventory by the end of this year and start replenishing stocks, according to George Chang, an analyst with Citigroup Global Markets in Taipei.

Still, excess supply remains a concern for some investors and producers. AU Optronics in September said prices have fallen "unreasonably" because rivals are adding to overcapacity.

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