Mon, Aug 28, 2006 - Page 12 News List

Analysts forecast improved LCD sales

RECOVERING DEMAND Better sales spurred by the back-to-school shopping period and price reductions are set to boost third-quarter sales figures for local panel makers

By Lisa Wang  /  STAFF REPORTER

Taiwanese flat panel and component makers are expected to post better sales for the current quarter, boosted by recovering demand after drastic price cuts and the back-to-school shopping spree, a local research house said in a report.

Sales for five local panel makers would rise by 6 percent quarter-on-quarter to total NT$28.73 billion (US$874 million) on recovering demand after a slow second quarter, the government-sponsored Industrial Technology Research Institute (工研院) projected.

During the three month period ended June, sales slid by about 10-percent to NT$27.09 billion from the first quarter, according to the Hsinchu-based researcher.

Seasonal factors and weaker-than-expected demand for liquid-crystal-display (LCD) televisions during the soccer World Cup caused a supply glut and price decline last quarter, Jim Chung (鍾俊元), a flat-panel industry analyst said in the report released last week. Chung saw signs of a revival.

"Falling prices are spurring demand for computer panels. Plus, back-to-school shopping in fall will further fuel the momentum," Chung said in the report.

Chung predicted that the thin-film-transistor liquid-crystal-display (TFT-LCD) suppliers, which accounted for almost 70 percent of the industry's total sales, would increase sales by 5.3 percent to NT$18.98 billion this quarter from NT$18.03 billion last quarter.

"We expect the industry to rebound sometime between late in the third quarter and the fourth quarter," Chung said.

The nation's largest LCD panel maker, AU Optronics Corp (友達光電), told investors recently that prices for computer panels were bouncing back, and it planned to boost factory usage to cope with rising demand.

Another market research firm, DisplaySearch, also said prices for computer panels would pick up this quarter after a 21-percent year-on-year drop to US$1,605 per square meter last quarter.

In the current quarter, prices for computer panels would pick up from the April-June period, but prices for TV panels would drop further, the Austin, Texas-based research house predicted.

"Most suppliers will therefore remain under margin pressure in the third quarter of this year," DisplaySearch said.

Price erosion pushed most flat-panel makers around the world into the red last quarter including industry leader South Korea-based LG Philips LCD Co, which reported record high losses of 322 billion won (US$334.7 million) in the second quarter, while AU Optronics earned NT$183 million.

But in terms of revenues, South Korea reclaimed its top position in the LCD industry last quarter for computer and TV panels as they had new factories coming on-line, according to DisplaySearch's statistics. In the first quarter, Taiwan took the lead for the first time.

South Korean companies took 46 percent market share based on revenues during the second quarter, while Taiwanese players captured only 41 percent.

DisplaySearch expected South Korea to retain leadership in the second half of the year based on companies' shipment targets.

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