Japanese consumer electronics giant Sony Corp said yesterday it would consider purchasing 32-inch liquid-crystal-display (LCD) panels from Taiwanese manufacturers to cope with rising demand for its products, particularly its Bravia TVs.
Sony relies on S-LCD, a joint venture with Samsung Electronics Co of South Korea, for LCD panel supply. But fast-growing demand and limited scope to increase its production of 32-inch panels has prompted Sony to consider sourcing panels from Taiwanese makers.
"Sony will use [its] own panels primarily. But the market is expanding. Sony will consider sourcing [32-inch panels from] Taiwanese companies in the future," Makoto Kogure, a deputy president of Sony's TV and Video Business Group, told reporters in Taipei.
Kogure was in Taiwan for the launch of Sony's updated Bravia S-series range, which now boasts 40-inch and 46-inch models. Sony debuted the Bravia sub-brand in the country in August last year.
Kogure said Sony's LCD TV sales would amount to 6 million during this fiscal year, which began in April and concludes in March next year. He further predicted that sales would grow by about 33 percent to over 8 million next year.
S-LCD was running at full capacity to satisfy Sony's demand, Kogure said, adding that a new eighth-generation plant would ramp up production in August next year, two months ahead of schedule.
The new plant would be used to make 46-inch LCD TV panels rather than 32-inch panels, according to the Sony executive. Currently, S-LCD operates two seventh-generation factories, which make glass sheets for 40-inch and 36-inch panels at optimal cost efficiency.
"To meet growing demand, Sony is using AU Optronics Corp's (友達光電) 32-inch panels for its new Bravia S-series TVs. The volume will increase significantly in August," said Ken Yu (余文耀), a flat-panel industry analyst with SinoPac Securities Corp (建華證券), citing reliable sources.
In recent years, Sony has bought small-sized TV panels from local suppliers such as AU Optronics, the world's No. 3 maker of LCD panels for computers and TVs, and Chi Mei Optoelectronics Corp (
As the margin for 32-inch flat panels was shrinking fast, S-LCD would shift its focus to manufacturing larger panels such as 46-inch panels for TVs and source cheap 32-inch panels from outside the group, Yu said.
Consumers' desire to replace their bulky cathode-ray-tube TVs may prove a boon for AU Optronics and Chi Mei, Yu said.
Kogure said Sony expected explosive growth in the LCD TV market, from 50 million units this fiscal year to between 80 million and 100 million units in the next fiscal year.
With the help of its popular Bravia sub-brand, Sony aimed to cement its position as the leader in the world's TV market next year, Kogure said. Sony was the No. 1 TV brand in the first quarter.
In related news, Goldman Sachs yesterday cut its target price for AU Optronics Corp (
"We see no catalysts to support a TV panel price recovery in this cycle compared with the previous cycles," Helen Huang (
The investment bank estimated that 17-inch panel prices would drop by 8 percent, 19-inch panels by 5 percent and 32-inch panels by 4 percent. Next year, prices would fall by a further 12 percent, 9 percent and 9 percent respectively, the report said.
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