Thu, Oct 05, 2006 - Page 11 News List

Flat-panel makers have rosier days ahead: report

ITRI ASSESSMENT A government-funded think tank said returning schoolchildren and inventory clearance has boosted shipments and revived LCD panel prices


The nation's flat-panel makers could post strong sales growth in the final quarter, extending faster-than-expected demand in the current quarter, said the Industrial Technology Research Institute (ITRI, 工研院), a government-funded industry researcher, yesterday.

The Hsinchu-based institute's forecast joined the upbeat outlook of Austin, Texas-based researcher DisplaySearch on Tuesday, which expected the current rebound in panel prices to carry over into the next few months.

"Panel shipments and prices bounced back significantly in the third quarter, helped by back-to-school demand and pre-Christmas hot season inventory buildup by electronics vendors," ITRI analyst Jim Chung (鍾俊元) said.

"Better-than-expected growth has totally cleared inventory worries and caused a price up-tick in computer panels," Chung said, adding that robust demand had also eased a price decline for TV panels.

Overcapacity and excessive inventory in the first six months drove most panel makers into the red. Industry leader LG Philips LCD Co even reported a record-high loss for the second quarter.

But with recovery under way, Chung predicted that third-quarter sales for local flat-panel makers would total NT$193.44 billion (US$5.84 billion), up 7.5 percent from the second quarter and 2 percentage points more than his previous estimate.

Chung thus raised by 23 percent his sales forecast for the nation's major liquid-crystal-display (LCD) panel makers to NT$255.45 billion during the fourth quarter from a NT$207.49 billion estimate in July.

The adjusted sales forecast would represent quarterly growth of about 27 percent.

Rising panel prices would not only bring better sales, but also improved profits in the second half of the year, Chung said.

The upward adjustment has prompted total sales of LCD panel manufacturers for this year to rise 7 percent to NT$830.9 billion from an estimate of NT$779.85 billion.

But Chung warned that a possible shortage in LCD glass -- resulting from the world's No. 2 glass supplier Asahi Glass Co closing a local factory for regular maintenance -- may curb sales and shipment growth in the current quarter.

Separately, Chunghwa Picture Tubes Ltd (中華映管), the nation's third-biggest LCD panel maker, yesterday said that sales and shipments hit a record high last month. No more details were provided.

Consolidated sales jumped 29.2 percent year-on-year last month to NT$12.9 billion, or 17.4 percent from August. Shipments in panels over 10 inches expanded 65 percent to 2.35 million sheets from a year ago.

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