Taiwan's flat panel display industry is expected to register strong growth this year, driven mainly by booming demand in the global liquid-crystal-display (LCD) television market, industry analysts said yesterday.
Industry sales will be sluggish in the first quarter of the year because of a slowdown in demand for personal computers, but should gradually pick up in the second quarter, when shipments of large-area LCDs are likely to increase to meet the expected high demand for flat panel TVs driven by this year's Olympic Games, the analysts said.
According to a forecast by the display market research and consulting firm DisplaySearch, the global supply of large-area displays will exceed demand by 13.8 percent in the first quarter, then fall to 9.2 percent in the second quarter and 8.7 percent in the third quarter before recovering to 9.6 percent in the fourth quarter.
Supply exceeding demand by less than 10 percent is indicative of a tight supply situation.
`SUPER CYCLE'
A number of international investment consulting firms, including Morgan Stanley, have predicted that the global flat panel display industry will experience a "super cycle" this year thanks to the fast-growing LCD TV market.
They project a sharp increase in global LCD TV panel shipments as 42-inch and 47-inch displays replace smaller ones to become the mainstream LCD module sizes.
DisplaySearch and Taiwan's Industrial Technology Research Institute have both forecast that annual global LCD TV panel shipments will top 100 million units for the first time this year.
TV DOMINANCE
LCD TV shipments are also likely to exceed 100 million units this year, as LCD TVs gain dominance over traditional cathode ray tube (CRT) TVs for the first time in the global television market, according to the forecast.
The popularity of LCD TVs has grown in recent years as consumer prices have fallen and the US, Japan and European nations have promoted digital television.
The increased growth is expected to help panel suppliers boost income this year after a bumpy last year that saw most companies finish strong.
Taiwan's leading flat panel suppliers -- AU Optronics (AUO, 友達光電), Chi Mei Optoelectronics (奇美), Chunghwa Picture Tubes (華映) and HannStar Display (翰宇彩晶) -- all recovered from losses in the second quarter of last year to post significant increases in earnings in the second half of the year.
AUO, for example, had an after-tax net income of NT$23.4 billion (US$721.4 million) for the first three quarters of last year, despite an after-tax net loss of NT$5.1 billion in the first quarter, and is expected to set a record for earnings with after-tax net income exceeding NT$50 billion for the year.
According to the Taiwan-based Institute for the Information Industry's Market Intelligence Center, Taiwan's flat panel display output is estimated at NT$1.4 trillion for this year, with the value projected to continue expanding over the next seven years to reach NT$2.5 trillion by 2015.
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