Fri, Oct 03, 2008 - Page 12 News List

HannStar to close assembly line and lay off employees

By Lisa Wang  /  STAFF REPORTER

Taiwanese flat-panel maker HannStar Display Corp (瀚宇彩晶) yesterday confirmed plans to cut 12 percent of its local work force when it shuts down a costly panel module assembly line next month.

But the Taoyuan-based panel supplier said it would not trim output like its bigger rivals to cope with the latest downturn caused by a supply glut and economic weakness.

While cutting its work force in Taiwan, the liquid-crystal-display (LCD) panel maker is moving a larger portion of the firm’s labor-intensive module assembly work to China as its local rivals have done.

“The personnel adjustment is part of our long-term efforts to shift labor-intensive module assembly to our Nanjing plant in China, which has become the company’s module assembly center,” said Justin Chien (簡宏毅), a HannStar public relations official said.

TRANSFORMATION

HannStar plans to transform the module assembly plant in Kaohsiung into a research and development center to improve cost efficiency, Chien said.

This would mean cutting its work force by 12 percent as it would only need about 200 employees for the research center.

Hannstar had 3,447 workers in Taiwan as of August. The Kaohsiung plant, which has a staff of 600, turns out 100,000 computer and television panel modules a month, only one-tenth of the 1 million units produced by its Nanjing plant, company figures showed. HannStar also assembles panel modules in Wuhan, Hubei Province, in China.

SHIPMENTS FLAT

HannStar said it saw no reason to lower its capacity utilization rate as demand for its products was stable. Shipments would remain flat in the third quarter, which stood at 4.9 million units — mainly consisting of computer panels — in the second quarter, the company said in August.

Shares of HannStar declined 3.14 percent to NT$7.1 yesterday, while its larger competitors — AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子) — saw their shares rise 0.28 percent and 0.48 percent respectively.

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