Wed, Feb 16, 2005 - Page 10 News List

HannStar foresees quarterly growth in panel shipments

By Lisa Wang  /  STAFF REPORTER

HannStar Display Corp (瀚宇彩晶), a small local liquid-crystal-display (LCD) panel supplier, yesterday said shipments will grow quarter by quarter on rising demand for computer monitors and slim-screen televisions.

"Consumption of LCD glass substrates is increasing as monitors and flat-panel TVs are getting bigger, in addition to a growth in volume," HannStar president Davie Chou (周定輝) said at an investors' conference.

Global demand for computer monitors would grow to around 100 million units from 75 million units last year, Chou predicted. Around 70 percent of HannStar's production goes to that market.

In the current quarter, HannStar's shipments will expand by a significant double-digit percentage over the previous quarter, Chou said. For the full year, HannStar's shipments will more than double to 12 million units of substrate glass versus 5.69 million units last year.

But, low visibility on pricing trends -- a make-or-break factor in the highly cyclical industry -- makes it difficult to determine when HannStar would return to profit.

"It's hard to predict the prices ? We're seeing prices for 17-inch and 19-inch LCD screens stabilize now. But, the momentum for an uptick looks weak," Chou said.

HannStar posted its second consecutive quarter of net losses in the fourth quarter. The company's losses for the quarter widened to NT$1.77 billion, or NT$0.35 a share, after panel prices crumbed by over 40 percent in just two quarters to average US$141 per unit last quarter.

As prices for 15-inch screens are continuing to drift lower in the current quarter, it would be difficult for HannStar to clock gains, said Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).

"Losses for HannStar will grow even wider in the first quarter, given lower panel prices and an additional NT$1.3 billion amortization for new equipment," Yu said.

Robert Lin (林家宇), an analyst at Yuanta Core Pacific Securities (元大京華證券), however, believes that the slide in panel prices could end in the first quarter in light of steady prices for the mainstay 17-inch panels.

LCD panel makers' firm share prices already reflect that optimistic view, Lin said.

Since the beginning of the year, HannStar's shares have leapt 12 percent, closing at NT$11.6 yesterday on the nation's over-the-counter market, the Greitai Securities Market (櫃台買賣中心).

But, a more severe supply glut is expected to return within the next two quarters after output from new production capacity at Taiwanese and South Korean flat screen makers pours into the market, Lin said.

Potential oversupply has not stopped HannStar from investing in new facilities, however. The company plans to spend NT$20.2 billion in capital expenditures this year, down from NT$35.4 billion last year.

The company said that the construction of a sixth-generation plant, which will produce bigger screens for TVs, is on track.

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