Flat panel revenues to grow 23 percent

The nation's flat panel display industry is expected to see revenues grow 23 percent this year, bolstered by the expansion of computer and television panel makers and stable prices, government-fund researcher Industrial Technology Research Institute (ITRI, 工研院) forecast.

Overall, revenues of flat panel display companies including makers of panels and components are expected to grow by 22.6 percent to NT$2.15 trillion (US$68.9 billion), compared with NT$1.75 trillion last year, when revenues rose 37.6 percent as they recovered from a slump, Hsinchu-based ITRI said in a report released last week.

New output and stable prices will be the main drivers of revenue growth this year, ITRI said.

Computer panel prices are expected to slide between 3 percent and 5 percent this month compared with last month as a result of seasonal factors, while TV panel prices should stay steady, market research WitsView forecast.

For the full year, AU Optronics Corp (友達光電), the nation's biggest flat panel maker, said it was optimistic as it expects supply constraints this year as consumers upgrade from traditional cathode-ray-tube TVs and as PC demand grows in developing economies.

Makers of thin-film-transistor liquid-crystal-displays (TFT-LCD) for computers and televisions will experience the strongest growth, expanding 26 percent to NT$1.37 trillion, ITRI said.

Major players AU Optronics Corp and Chi Mei Optoelectronics Corp (奇美電子) will resume construction of next-generation, or 8.5-generation, production lines to meet rising demand for big-screen LCD TVs, but production is not scheduled to increase until the second half of next year.

Last year, flat panels for gadgets with screens smaller than 10 inches saw the strongest growth, fueled by strong demand for new products such as local notebook maker Asustek Computer Inc's (華碩) low-cost Eee PC laptop, which is fitted with a 7 inch screen, ITRI said.

In light of robust demand for smaller flat panels, small and medium size flat panels will be one of the top priorities this year for AU Optronics and Chi Mei, which will reallocate existing manufacturing facilities to take advantage of the fast-growing market.

Revenues from small and medium LCD panels are expected to grow 22.7 percent to NT$156 billion this year, compared with NT$127 billion last year, when revenues leapt 69 percent year-on-year.

Optimism for the flat panel industry's prospects has again made shares in panel makers a priority for investors. AU Optronics, Chi Mei and computer monitor and panel maker Innolux Display Inc (群創光電) were three of the five most traded shares on Friday, rising by 2.8 percent to the 7 percent daily limit.