"That will strengthen my assumption that local flat-panel makers may start to book profits in the third quarter," Lin said.
Market searcher DisplaySearch's latest report coincided with Lin's view. Global LCD TV shipments exceeded expectations in the third quarter of last year, rising 36 percent quarter-on-quarter to 2.2 million.
The shrinking price gap between the sleek LCD TVs and boxy cathode-ray-tube sets also helps to accelerate replacement of traditional TV sets, Lin said.
Global demand for slim-screen TVs is expected to more than double to over 19 million sets this year, compared to less than 8 million last year, according to Lin.
Built on that optimism, Lin expects AU Optronics and Chi Mei to post profits of NT$5.6 billion and NT$4.3 billion, respectively, this year.
HannStar, however, could see losses widen to NT$8 billion, he forecasts.
Huge losses from an industrial downturn usually prompt speculation over consolidation -- seen as the last option for weak players. But analysts said the possibility of mergers among Taiwan's TFT-LCD players is slim.
"Building a cost-effective next-generation plant will be a better option for industry leaders than spending cash to acquire less advanced factories," Lin said.
Instead of consolidation, local manufacturers of TFT-LCD panel for monitors and TVs chose to diversify into small-sized screens for handsets and portable DVD players to weather the downturn.
"But, the effect will be very limited as small-sized panels consume merely a small part of their capacities," said Annabelle Hsu (徐美雯), an analyst with researcher Market Intelligence Center (市場情報中心) in Taipei.
Hsu said that strong growth from LCD TVs is still the last hope for LCD panel suppliers to balance the quickly expanding capacity.
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