Chunghwa Picture Tubes Ltd (中華映管), the nation’s third-largest liquid-crystal-display (LCD) panel maker, yesterday gave a bearish outlook for the third quarter, saying demand would be slower than usual as consumers hesitated to buy electronics amid a weak macro economy.
The Taoyuan-based company said major PC makers cut back orders to panel makers last month to digest excessive inventory, but said it was seeing orders recover slowly this month.
“We believe demand in the third quarter will not be as strong as in the same period last year. Last year, customers scrambled to buy as many panels as they could,” company president Chiu Chuang-yi (邱創儀) told reporters yesterday. “This year, we’ll still see a peak season, but it may not be as strong as it used to be.”
People were curtailing their spending on electronics — especially large TVs — because of rising oil prices and slower economic growth, dragged down by the US subprime credit crisis, Chiu said.
Some panel makers have started reducing, or plan to reduce, equipment usage to cope with diminishing demand.
Chunghwa Picture, however, said it had no plan to follow suit, citing limited impact on overall supply in light of the small scale of its output.
Its equipment utilization rate is currently at around 90 percent, Chiu said.
Reflecting dwindling demand and a supply glut, computer panel prices are expected to decline by an additional 3 percent to 10 percent this month from last month, the latest report by market researcher DisplaySearch said.
Monitor panels will suffer the brunt of the decline, it said.
The price for a mainstay 19-inch LCD panel is expected to fall 8 percent, or US$10, to US$115 per unit this month from last month, the Austin, Texas-based researcher said.
“The price forecast is different from the factual situation,” Chiu said.
He projected a slower-pace price decline of US$5 per unit for monitor screens.
Chunghwa Picture generated a large portion, or about 70 percent, of its revenues of NT$3.9 billion from selling computer monitor panels in the first quarter.
Prices for TV panels slid more slowly, ranging from 1.3 percent to 3 percent, DisplaySearch said.
Because of escalating oversupply and an uncertain future in the industry, Chunghwa Picture said it had slowed down talks with partners on plans to build a next-generation plant.
“We may reach an agreement with our partners in the third quarter,” Chunghwa Picture chairman Lin Wei-shan (林蔚山) said yesterday.
Chunghwa Picture originally planned to conclude the talks by end of last month.
Shares of Chunghwa Picture declined 2.13 percent to NT$8.28, performing better than shares of bigger rivals AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子), which plunged by 2.59 percent and 5.16 percent, respectively.
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