The world's major flat-panel makers, including Taiwan's AU Optronics Corp (友達光電), would benefit from the planned merger of China's three computer panel makers, as reduced output would ease overcapacity-driven price decline, according to investment research.
BOE Technology Group Co (京東方), China's biggest thin-film-transistor liquid-crystal-display (TFT-LCD) panel supplier, said last week it was set to merge with two Chinese rivals SVA Group (上海廣電) and InfoVision Optoelectronics (龍騰光電) by June 30.
The merger would create a new entity with a global market share of 5 percent, up from BOE's current 3.9 percent.
It would also help the Chinese company's market position to improve and challenge the world's fifth-largest flat panel maker, Taoyuan-based Chunghwa Picture Tubes Ltd (中華映管).
"It [the merger] will improve industry discipline and also suggests that there will not be any new comers in China in the future," Frank Su (
On top of that, "it will reduce global supply by 2 percent in 2008," Su said.
Originally, two sixth-generation (6G) Chinese plants were due to start mass production in the second half of next year and the first half of 2009, but now there would be only one in the wake of the consolidation, Su added.
Taiwan's two largest TFT-LCD panel makers, AU Optronics and Chi Mei Optoelectronics Corp (奇美電子) as well as South Korea-based LG Philips LCD Co would benefit from better industry discipline, or less stiff price competition, Su said.
In May Su said that consolidation among China's three LCD panel manufacturers would occur within two to three years on growing financial difficulties, falling panel prices and AU Optronics' acquisition of local competitor Quanta Display Inc (
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