Thu, Feb 22, 2007 - Page 6 News List

Government issues optimistic forecast for LCD producers

By Lisa Wang  /  STAFF REPORTER

Taiwanese liquid-crystal-display (LCD) panel makers are expected to increase sales to NT$2 trillion (US$60.62 billion) in 2015 as they expand capacity to meet future demand, the government's latest forecast said.

Led by AU Optronics Corp (友達光電), local flat-panel makers last year reported NT$1.28 trillion in sales, making Taiwan the biggest computer and TV panel exporter, beating rival South Korea.

The government has been supporting the expansion of the thin-film-transistor (TFT)-LCD industry, aiming to make the industry one of the major growth engines for the nation's economy.

Over the next five years, Taiwanese manufacturers are expected to invest more than NT$800 billion on building new next-generation plants to cope with fast-growing demand for slim screens, a report released by the Ministry of Economic Affairs said last week.

Demand for computer and TV screens is expected to grow to 452 million units by 2010 from 239 million units last year, the report said.

The ministry did not say how it calculated the projection.

Demand for TV panels could grow at a composite annual growth rate of 30 percent to 176 million units by 2010, the ministry said.

By 2009, local companies would have a total of 17 fifth-generation (5G) -- or more advanced -- plants, including four sixth-generation (6G) plants, three 7.5G plants and one 8G plant, the report said.

In the short term, Taiwanese companies would be careful about capacity expansion amid an oversupply-driven downturn.

AU Optronics said earlier this month that it planned to spend between NT$90 billion and NT$95 billion on new facilities and equipment this year, slightly lower than NT$100 billion last year, to minimize price erosion due to a potential glut.

Chi Mei Optoelectronics Corp (奇美電子), the nation's second-biggest LCD panel maker, also planned to spend less this year at NT$70 billion to NT$75 billion, compared to last year's NT$110 billion.

The two companies are cautious about building next generation -- or 8G -- factories, citing limited demand for TVs with 50-inch or bigger screens.

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