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ITRI predicts strong revenue growth for panel makers

Flat-panel figures * Expected revenues for Q2: NT$22.32 billion. * Taiwanese LCD-panel exports to South Korea last year: NT$40 billion. * Total revenue generated by sales of PC and TV panels last year: NT$76.53 billion.

Taiwanese manufacturers of liquid-crystal-display (LCD) panels for computers and televisions are expected to report nearly 40 percent annual growth in revenues this quarter, helped by a rebound from last year's downturn, local market researcher Industrial Technology Research Institute (ITRI, 工研院) said yesterday.

Total revenues may rise to NT$22.32 billion (US$669.2 million) during the second quarter, from NT$16.07 billion a year ago, representing a 15.5 percent quarterly increase.

"As the inventory glut is coming to an end, customers are booking panels earlier than before," Jim Chung (鍾俊元), a flat-panel industry analyst with Hsinchu-based ITRI, said in a report released yesterday.

The price for computer panels began to pick up last month and prices for TV screens were also stabilizing, Chung said, adding that the price hikes would give a boost to flat-panel manufacturers' bottom lines.

AU Optronics Co (友達光電), Taiwan's biggest and the world's No.3 LCD-panel supplier, said it expected to return to the black this quarter and planned to boost factory usage to more than 95 percent to match customer demand.

Separately, ITRI said that the recent alliance between South Korean electronics firms Samsung Electronics Co, Samsung SDI, LG Electronics Co, and LG Philips LCD Co to cooperate in developing panel manufacturing technologies and patent sharing would have a limited impact on Taiwanese panel manufacturers.

Under the alliance, the four companies aim to reduce their imports of LCD panels and LCD components to reduce cost.

Taiwan's major flat-panel manufacturers, including AU Optronics and Chi Mei Optoelectronics Corp (奇美電子), are supplying slim screens used in TVs to Samsung Electronics and LG Electronics, ITRI said.

"As there are far more LCD TV makers than panel suppliers, Taiwanese panel companies will have much leeway to adjust their customer portfolios to cope with the possibility of diminishing orders from South Korean firms," ITRI said in a separate report.

Last year, local companies exported around NT$40 billion worth of LCD panels to South Korea, which accounted for just 5 percent of the overall revenues of NT$76.53 billion generated by local companies from PC and TV panels in the same period, ITRI said.

ITRI predicted a rough ride ahead for the four allied South Korean firms, as product launches could take longer as a result of additional efforts to negotiate on new panel sizes or product designs.

However, ITRI expects the alliance to have a bigger impact on local panel-material suppliers such as Coretronic Corp (中強光電) and Radiant Optoelectronics Corp (瑞儀) in light of fierce competition.

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