Some Taiwanese liquid-crystal-display (LCD) panel makers are bracing for a bleak second quarter as weaker-than-expected demand for computers and TVs drove prices lower to approach their cost level, an industry analyst said yesterday.
The warning came after South Korean flat-panel maker LG.Philips LCD Co on Monday halved its earnings before interest, taxes, depreciation and amortization (also known as EBITDA margin) to around 10 percent of sales in the current quarter, down from the previous estimate of 20 percent.
LG.Philips LCD's revision came one week after AU Optronics Corp (友達光電), the world's third-largest LCD maker, halved its second-quarter shipment growth rate to less than 10 percent from the previous quarter.
The Taiwanese firm also predicted a 10 percent decline in prices this quarter.
FALLING PRICES
"Concerns [about possible losses in the current quarter] were raised among executives of [second-tier] Taiwanese companies as prices are dropping to near their costs," said Michael Wang (
In the middle of last month, the price of a 32-inch panel fell to around US$440 to US$450, compared to flat-panel makers' US$450 cost, said Frank Lee (
Wang said prices had declined at a faster rate largely due to the seasonal factor of sagging demand for computer monitors.
"Demand for TVs for the World Cup has also been disappointing," he said.
ANNUAL SHOW
Wang made the comments on the sideline of a press briefing for the annual flat-panel show FPD Taiwan 2006, which begins today and runs through Friday at the Taipei World Trade Center. Some 527 companies from home and abroad will showcase their latest products.
Weak demand and increasing output has prompted panel makers such as LG.Philips LCD and AU Optronics to announce plans to cut production.
Wang said that would be help deal with inventories, but that demand would still be the key for the flat-panel industry to get back on track.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to