Japanese consumer electronics giant Sony Corp may purchase more liquid-crystal-display (LCD) panels from Taiwanese manufacturers to meet a spike in demand for slim-screen televisions this year, a company executive said yesterday in Taipei.
Sony, which recouped top position in the TV sector last quarter helped by the Bravia brand, relies heavily on S-LCD, a joint venture with Samsung Electronics Co of South Korea, for LCD panel supply.
But, analysts have speculated that growing demand for LCD TVs this year may prompt the Japanese vendor to order more panels from existing suppliers, including Taiwan's AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子).
"To cope with skyrocketing demand for LCD TVs, Sony's priority now is to expand capacity for S-LCD by boosting equipment investment in the near future," Sony president Ryoji Chubachi told a press conference in Taipei yesterday.
"Sony will also increase procurement from OEM (original equipment manufacturing), or ODM (original design manufacturing) makers in accordance with demand," he added.
The company has not yet finalized component procurement, said Chubachi, who became Sony's president last April as part of the Japanese firm's efforts to revamp the 60-year-old brand.
"The macro environment is in favor of boosting the LCD TV market. The demand in the medium term may exceed Sony's internal forecasts," he said.
LCD TV sales for this year are expected to more than double to 42 million units from 19 million last year, according to market researcher DisplaySearch's projection.
"Sony is likely to source flat panels from local suppliers to meet demand for the key 32-inch TVs as S-LCD primarily makes panels for bigger-screen TVs," said Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).
S-LCD currently operates two seventh-generation factories, which make glass sheets for 40-inch and 36-inch panels at optimal cost efficiency, Yu said.
This highlights a growing trend as Japanese consumer electronics vendors such as Sharp Corp are looking to flat panels from Taiwanese manufacturers to trim costs on falling prices of LCD TVs, he said.
Sony, one of the top 10 foreign buyers of electronics made by Taiwanese manufacturers, stepped up orders by double-digit percentage points in the last fiscal year ending in March, the company said.
Last year, foreign companies including computer vendors Hewlett-Packard Co and Dell Inc increased procurement from local firms by nearly 20 percent from a year ago to US$66.1 billion, according to government statistics.
The figure would expand to over US$70 billion at least during this year, according to a survey by a government agency.
Chubachi was in Taipei yesterday to open the "Sony Fair @ Taiwan 2006," a 10-day festival showcasing the latest products from Sony and its affiliates at the Taipei 101 square.
During the opening speech, Chubachi said the company has laid out a vision for a "High-Definition World" this year. Products which deploy high-definition (HD) technology offer superior video quality and sharpness compared to those based on the earlier standard-definition format, he said.
Sony has sold millions of HD products, including LCD televisions and digital video recorders, he said, adding that the company's Blue-ray DVD recorders and PlayStation 3 game consoles would be added to the lineup later this year.
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