Sat, Jun 05, 2010 - Page 12 News List

AmTRAN’s move into LED packaging fails to spur stock


Investors yesterday reacted coolly to TV maker AmTRAN Technology Co’s (瑞軒) move to form an LED packaging venture with its major panel supplier, LG Display Co, and Everlight Electronics Co (億光).

AmTRAN’s stock fell 0.78 percent, or NT$0.25, to close at NT$31.80, as its latest attempt to solve a LED supply constraint through the joint venture would provide limited help this year, market observers say. The stock underperformed the benchmark TAIEX, which lost 0.21 percent. Everlight shares also dipped 1.76 percent to close at NT$83.50.

A fast uptake of LED TVs has caused a severe shortage of LED chips, as TV makers, including LG Electronics, seek to capture a share of the new ultra-slim TV market after Samsung Electronics Co’s success in the business.

In December, AmTRAN, which makes flat-panel TVs primarily for US TV brand Vizio Inc, spent NT$60.36 million (US$1.86 million) to purchase a 0.58 percent stake in local LED chipmaker Unity Opto Technology Co (東貝), as part of its efforts to secure supplies of LED chips.

On Thursday, it announced plans to form an LED packaging venture in Suzhou, China, with LG Display and Everlight, with an initial combined investment of US$30 million.

“The venture will help AmTRAN secure LED-backlight panels from LG Display, which lags rivals in investing in LED chipmaking and packaging businesses,” said Nancy Liu (劉美君), a flat-panel analyst with research house Industrial Economics and Knowledge Center (產業經濟與趨勢研究中心) in Hsinchu.

“The new LED packaging company, however, will take at least half a year to start operation. It will be unable to solve the pressing problem of short supply of LED chips,” Liu said.

Samsung is one of a few companies that are immune to the tight supply of LED chips, as the South Korean company has built its own supply chain a year or two ahead of its global competitors, Liu said.

AmTRAN blamed the short supply of the key component on falling TV shipments in the first quarter, when it shipped only 740,000 LCD TVs.

The new venture is expected to start operation at the end of this year, LG Display said in a statement yesterday. LG Display and AmTRAN will each hold 20 percent of the company, while Everlight will hold 60 percent.

AmTRAN said it planned to ship up to 2 million LED TVs this year.

LED TVs are expected to account for 20 to 30 percent share of overall LCD TV shipments this year, compared with a single-digit percent last year, Liu said.

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