Tue, Feb 22, 2005 - Page 11 News List

Chi Mei expects full factory capacity to come

BLOOMBERG

Chi Mei Optoelectronics Corp (奇美電子), Taiwan's second largest maker of flat-panel displays used in computer monitors and televisions, said its factory use will rise to full capacity this quarter from 95 percent at present on demand.

Screen prices have stopped falling, said Eddie Chen (陳炎松), spokesman for the Tainan-based company, responding to a Chinese-language newspaper report yesterday.

The company's factories, including new ones making panels for televisions measuring 32 inches and larger, will run at capacity this quarter, he said.

Chi Mei's factory use fell to 85 percent and the company had its first loss in almost two years in the fourth quarter on a supply glut.

Screen prices in the US$36 billion industry dominated by Samsung Electronics Co of South Korea have tumbled down more than a third since the middle of last year.

"There won't be any upside in the shares," said Steve Tu, who counts Chi Mei among the equivalent of US$40 million he manages for President Investment Trust (統一投信).

"The stock has already priced in expectations for demand recovery," Tu said.

Chi Mei's shares fell NT$0.40 to NT$46.30 yesterday.

The stock has gained 8 percent in value since Jan. 1, while the TAIEX has been unchanged.

The company said on Feb. 1 that it expects first-quarter shipments to grow more than 10 percent from the previous three-month period, as demand rebounds.

AU Optronics Corp (友達光電), Taiwan's largest screen supplier, last week said its factory use will increase to about 95 percent in the first quarter from 75 percent in the fourth quarter.

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