Local makers of liquid-crystal-display (LCD) panels may post another unprofitable quarter as inventory buildup demand and new orders from Chinese TV makers may not be strong enough to support a solid rebound, a Taipei-based researcher said yesterday.
The comments from Photonics Industry and Technology Development Association (PIDA, 光電協會) come amid recent optimism fueled by fresh orders from Chinese customers expected to double their purchases of flat panels from Taiwanese companies to US$4.4 billion.
“Demand from Chinese companies will indeed be helpful, but the [positive] impact will not be as significant as some expected,” since Chinese companies purchase only a portion of their total panel needs from Taiwanese firms, PIDA analyst Karen Ho (何孟穎) said yesterday on the sidelines of a press conference for a trade show starting tomorrow.
The nation’s two biggest LCD panel suppliers, AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子), said China could account for between 20 percent and 30 of their total TV panel shipments this year.
The US and Europe will remain the main export destinations.
The recent rebound has been supported primarily by demand for inventory restocking, yet it is unclear whether end-demand is recovering, Ho said.
Although panel prices have recovered over the past several months, local makers of LCD panels are still losing money, selling most products, with the exception of certain TV panels, for less than production costs, Ho said.
AU Optronics and Chi Mei have lost NT$46.81 billion (US$1.42 billion) and NT$50.7 billion over the past two quarters.
Panel prices are expected to rebound by between 10 percent and 15 percent this quarter from last quarter as retailers stock their inventories and demand from China increases, but the gain could be brief if end-demand does not pull through, local market researcher WitsView said in a report last week.
“We are concerned that the recent rebound could end abruptly in June as happened last year, indicating no seasonal demand in the third quarter,” Ho said.
Companies face an uphill struggle to turn the situation around this quarter and next quarter, Ho said.
Separately, PIDA, an organizer of the Photonics Festival in Taiwan 2009 annual trade show, said the show was expected to attract more than 35,000 potential buyers and bring NT$30 billion in orders for local firms.
The show is an important venue for panel makers to showcase their latest products.
Local panel makers including AU Optronics plan to display their latest 3-dimensional displays, touch panels and electronic reader displays.
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