Chunghwa Picture Tubes Inc (中華映管), the nation's third-largest maker of liquid-crystal-display (LCD) panels, is set sign a strategic partnership by the end of the year to boost competitiveness, chairman of Chunghwa Picture's parent company said yesterday.
"There is no need to dispose of Chunghwa Picture. We will bring in a strategic partner, probably before the end of this year," said Lin Wei-shan (
Lin made the remarks yesterday during a visit to Tatung's first flagship showroom in the nation.
On March 11, Lin said that Chunghwa Picture was in merger talks that might reach conclusion within six months. He didn't elaborate at the time.
Fitch Ratings said on Tuesday that a wave of merger and acquisition will sweep through the LCD panel industry as second-tier makers have to boost economies of scale due to limited product mix, lower capital spending, and pressure when panel prices are falling.
There has been market speculation on the share-sale or partnership plans of Chunghwa Picture. Last year, the unprofitable company was reportedly seeking to sell a stake to either Innolux Display Corp (群創) or Quanta Display Inc (廣輝), although all three companies denied the speculation at the time.
Chunghwa Picture reported a net loss of NT$1.47 billion (US$45.4 million) for the first quarter of this year, compared to a net loss of NT$3.98 billion the same period a year ago, according to its financial statement.
Asked whether Chunghwa Picture will turn its partnership attention to Innolux or Chi Mei Optoelectronics Corp (奇美電子) -- after AU Optronics Corp (友達光電), the nation's biggest LCD panel maker, shocked the industry by merging with smaller rival Quanta Display in April, Lin said only that the new partner would be a "surprise."
"Flat panels is a young and vibrant industry, makers shouldn't have slashed prices irrationally just to fight for orders," Lin said, adding that share prices of Chunghwa Picture would "rebound" after the partnership was formed.
Chunghwa Picture's shares closed up 0.14 percent at NT$7.11 yesterday on the Taiwan Stock Exchange, a price which Lin said was lower than its net value of NT$12.
But Lin appeared happy about Tatung's 180-ping flagship showroom, which is located near the intersection of Zhonghsiao East Road and Fuhsing South Road.
Tatung plans to pump in more than NT$100 million to turn nine more of its traditional outlets nationwide into flagship showrooms by next April, said Larry Hsiao (
He expects a brisk business outlook this year as sales of Tatung's small home appliances have been good.
These products, including water machines, shredders and fly catchers, offer higher margins than flat-screen televisions and other high-tech gadgets, he said.
Shares of Tatung were down 4.2 percent at NT$12.55 on the Taiwan Stock Exchange yesterday.
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