Shares of Taiwan's No.3 flat panel maker Chunghwa Picture Tubes Ltd (
Tatung Co (
Hon Hai and Quanta Computer both have liquid-crystal-display (LCD) panel manufacturing arms -- Innolux Display Corp (
While the news has been in circulation among industry players for a while, a Chinese-language newspaper reported yesterday, citing Tatung president Lin Wei-shan (
Tatung, one of the nation's biggest television makers, yesterday denied the report and any plan to sell its stake of Chunghwa Picture.
"There is a misunderstanding. Tatung is concerned about the performance of Chunghwa Picture, but we have no plan to sell the company," Tatung spokesperson Ming Ho (
Chunghwa Picture spokesman James Wu (
Shares of Chunghwa Picture rose 2.87 percent, or NT$0.3, to NT$10.75 on the Taiwan Stock Exchange yesterday, outperforming the TAIEX, which rose 0.14 percent.
Tatung's shares also climbed 3 percent to NT$10.25.
"The sale would have a positive impact on the two companies, Tatung in particular, as it would get rid of a financial burden," said Bill Lan (藍新仁), a fund manager of Jih Sun Securities Investment Trust Co (日盛投信).
Chunghwa Picture posted a loss of NT$7.4 billion, or NT$1 per share, in the first half of this year after panel prices plunged on a supply glut.
Industry watchers and the government have been calling for consolidation among the nation's LCD screen makers to reduce risks in the highly cyclical and capital-intensive industry.
"The timing is good for flat-panel makers to undertake merger talks now, after posting huge losses [in the oversupply-driven downturn of the past few quarters]," said Frank Wang (王安亞), an analyst with Morgan Stanley.
"But, it's difficult to see any result," Wang said.
Tatung's sale of Chunghwa Picture, if it materializes, would mark the second merger in the nation's flat panel industry after Acer Display Technology Inc combined with Unipac Opto-electronics Corp (
That deal created the nation's biggest LCD panel maker, AU Optronics Corp (