Taiwanese liquid-crystal-display (LCD) panel maker Prime View International Co (
Prime View, which makes LCD panels for a wide range of products including DVD players and mobile phones, said it would boost its capacity four-fold after merging three plants owned by BOE-Hydis.
"We have been unable to catch up with customer demand, though we are buying as many panels as possible. This deal provides a complete solution to our problem," Prime View chairman Scott Liu (劉思誠) told a press briefing yesterday.
Prime View now operates a 2.5-generation plant. The deal is scheduled to close in the first quarter of next year. It led a consortium in signing the MOU to buy the stake by subscribing to BOE-Hydis' new shares and corporate bonds.
Prime View will contribute NT$7.5 billion to the deal, while two Hong Kong-listed partners would provide the remainder of the investment.
BOE-Hydis primarily makes LCD panels for notebook computers and mobile phones.
Like most other LCD panel makers, Prime View said it was bullish about demand next year on the back of consistently strong demand for mobile phones, digital photo frames and new low-cost Eee PCs.
Shares of Prime View jumped 6.89 percent to NT$47.3 on the GRETAI Securities Market yesterday -- defying the broad market's 2.27 percent decline -- after the local Chinese-language Economic Daily reported that Prime View planned to buy a plant from BOE-Hydis.
"The small and medium panel industry is reversing the past year's trend of oversupply, reflecting on rising prices this year. There will be shortages next year as well," Liu said.
Prime View would see a significant increase in revenues following its acquisition, Liu said.
"Prime View must expect a severe shortage next year, or it would not take such a risky move to secure panel supplies," said Kevin Liao (
However, taking over the South Korean firm could prove to be an uphill job because of culture differences and South Korea's tough labor unions, Liao said.
Prime View said it was not worried about cultural and labor issues.
No layoffs are being planned and the plants would operate more efficiently, the company said.
Generally speaking, there would be a supply constraint on panels next year due primarily to strong demand for mobile phones, but the gap would be narrow, Liao said.
Prime View said that it planned to raise about NT$3 billion to NT$4 billion for the acquisition by issuing new shares and corporate bonds.
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