Thu, Aug 17, 2006 - Page 12 News List

Chunghwa Picture Tubes' stocks up three days straight


Shares of Chunghwa Picture Tubes Ltd (中華映管), Taiwan's third-largest maker of liquid-crystal-display (LCD) panels, rose for the third trade session in a row yesterday after the firm landed new orders for its television panels from rival Samsung Electronics Co.

The deal puts Chunghwa Picture in the same league as AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Co (奇美電子) as major 32-inch TV panel suppliers for Samsung.

Chunghwa Picture's stock gained 0.27 percent to NT$7.31 on the Taiwan Stock Exchange yesterday, underperforming the benchmark TAIEX index, which advanced 1.23 percent.

"We start supplying 32-inch TV panels to Samsung this month. We expect Samsung to be a major client of Chunghwa Picture in the TV panel area this quarter," said Ally Chen (陳佳謙), an official at the company's public relations department, in a phone interview.

Chen declined to reveal the size of the order, but said Samsung had already purchased computer monitors from Chunghwa Picture, sales of which generated over 95 percent of the local company's revenues last quarter.

Chen said the company expected monthly output of TV panels would exceed 100,000 units this month.

Samsung is sourcing more panels outside its own factories in order to cope with growing demand for its TV sets around the globe.

In the three months to June, Samsung overtook Sharp Corp as the world's second largest LCD TV vendor with market share expanding to 13.1 percent, closely tracking Royal Philips Electronics NV's 13.5 percent share, according to the latest tally of market researcher DisplaySearch.

But an analyst offered a cold response to the Samsung news, saying the deal would do little for Chunghwa Picture's bottomline.

"The company may not be able to generate profit from selling panels to Samsung," said Eric Lin (林宜正), a flat-panel industry analyst with Yuanta Core Pacific Securities (元大京華證券).

The cost was relatively higher than its rivals as the yield rate was low at

Chunghwa Picture's sixth-generation (6G) factory, where the company has just

begun manufacturing 32-inch panels for slim-screen TVs, Lin said.

Chunghwa Picture may expand its quarterly loss to NT$3.5 billion for the

last quarter from loss of NT$1.47 billion the first quarter, Lin projected.

The company is scheduled to release the second-quarter figures tomorrow.

According to DisplaySearch, sales of LCD TVs grew 28 percent to 9.4 million

sets in the April-June quarter from the first quarter as price fall spurred

demand. The researcher forecast the total sales of TV sets would increase to

42 million this year from around 8 million last year.

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