The ITRI plays a consulting role in the government’s formation of industrial policies.
The institute advised the Taiwanese government to remove the long-term ban on local panel makers from building factories in China, receiving positive initial responses from officials because of the improved trade ties between Taiwan and China, Chung said.
“You need to come up with unconventional strategies to cope with the ever-changing market situation,” Chung said. “The Chinese market is essential for local companies to sell their PC and TV panels, which will help reduce operational risk during the supply glut.”
Chung said: “It is an essential issue that Taiwanese panel makers lack strong brand support, while LG Display LCD Co can give a stable supply to parent company LG Electronics.”
LG Display and Samsung Electronics operated at a higher factory utilization rate of 85 percent to 90 percent in the first quarter, much higher than the 50 percent to 55 percent utilization rate of local firms, Citigroup said in an April 6 report.
With support from in-house brands and a weakening South Korean won versus the US dollar, LG Display and Samsung may become profitable next quarter, one quarter earlier than its rivals, Citigroup analyst Andrew Lu (陸行之) said in the report.
Despite a potential increase in orders, Taiwanese companies are concerned about the Chinese government’s role in joint ventures, which would make it more difficult for them to operate as efficiently as private firms, Yu said.
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