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ITRI forecasts surging display sales

Backed by the fast-growing demand for slim-screen displays, the nation's flat panel and component makers are expected to see 18 percent compounded annual growth rate in revenues to NT$2.93 trillion (US$90.67 billion) in 2011, a local market researcher said yesterday.

"Global panel makers are investing in factories to make big liquid-crystal-display [LCD] panels to cope with rising demand for bigger-screens for notebook computers, monitors and TVs," said Jim Chung (鍾俊元), an analyst at the Industrial Technology Research Institute (ITRI, 工研院) in Hsinchu.

"Taiwanese companies are no exception," Chung said.

This year, local manufacturers are expected to post NT$1.78 trillion in revenues, up 40 percent from last year's NT$1.27 trillion, Chung said.

More than 60 percent of this year's revenues would come from LCD panels for computers and TVs, he said.

Chung cautioned, however, that Taiwanese LCD panel makers should be more cautious about investing in next-generation -- eighth-generation or 10th-generation -- factories than their Japanese and South Korean rivals such as Samsung Electronics Co given the limited demand for 50-inch or bigger LCD TVs.

By 2011, LCD TVs with 50-inch, or bigger size, screens would only make up 10 percent of total shipments, as cost-effective plasma display panel (PDP) TVs would still dominate the large-screen TV market, Chung said.

Moreover, unlike their rivals, "Taiwanese companies lack strong local TV brand support and could face problems with overcapacity," Chung said. "Besides, the investment is huge."

Sharp Corp plans to spend US$4.5 billion on a new 10G LCD panel factory -- roughly twice the cost of a seventh-generation plant, which is widely used to make TV displays now, Chung said.

To reduce risks, Chung suggested that local LCD panel makers team up or seek collaborations with local or overseas TV vendors to build next-generation plants.

The nation's top LCD panel makers -- AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子) -- have announced plans to build their own next-generation factories, but both said they were in no hurry to start construction.
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