Sat, Apr 07, 2007 - Page 12 News List

LCD panel prices set to rebound on falling inventories


Prices of liquid-crystal-display (LCD) panels for computers are expected to rebound mildly early this month amid falling inventories, signaling an early recovery from a nearly one-year trough, the Taipei-based research house WitsView Technology Corp (聯景科技) said.

The movement of desktop computer panel prices is usually seen an indicator for the volatile LCD industry as desktop computer panels make up the biggest portion -- approximately 40 percent -- of overall panel production.

Prices for mainstream 17 inch and 19 inch panels used in PC monitors could rise 2 percent to US$120 per unit in the first half of this month, WitsView's latest projection, released on Wednesday, said.

The price rebound would be faster than expected by most flat-panel manufacturers -- including AU Optronics Corp (友達光電), the world's third-largest flat panel maker, which said panel prices could begin to stabilize in the second quarter.

Last month, AU Optronics said it saw demand reviving significantly, but that "it is too early to expect prices to increase."

WitsView attributed the early recovery to the consensus among flat panel makers on reducing factory usage to alleviate price pressure on a supply glut.

Prices for mainstay 37-inch TV panels could hold steady at US$450 per unit as of the first two weeks of April, ending a non-stop fall in the past few quarters, the market researcher said.

Share prices of AU Optronics and the nation's second-biggest flat-panel supplier, Chi Mei Optoelectronics Corp (奇美電子), advanced 12.27 percent and 7.6 percent to NT$50.02 and NT$35.8, respectively.

The price rebound prompted BNP Paribas Securities to upgrade its rating on smaller maker Innolux Display Corp (群創光電) to "buy," on par with AU Optronics and Chi Mei.

"The LCD cycle reversed late March, a month earlier than we expected," BNP Paribas analyst Frank Su (蘇穀祥) said in a report released on Wednesday.

Innolux's plan to build a next-generation, or 7.5G, factory to tap into the LCD TV market was also one of the major reasons behind the revaluation, Su said.

Benefiting from the price uptrend, Su also raised his earnings forecast for Innolux for this year and next year by 14.4 percent and 17.7 percent, respectively.

Innolux, which makes its profits mainly on the in-house supply of 17-inch and 19-inch panels, expects to boost profit on in-house panel supply by US$4 to US$24 per panel, Su said. Su also raised the target price of Innolux by

25 percent to NT$111.

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