The Chinese government is expected to increase import tariffs on semi-finished LCD products to about 5 percent next month, rather than doubling the tax as some had speculated, in the hopes of increasing the incentive for Taiwanese and South Korean LCD makers to build plants in China, market researcher DisplaySearch said.
To protect Chinese LCD panel makers, such as BOE Technology Group Co (京東方), which are market latecomers with weaker technological abilities, the Chinese government was mulling a hike in import duties on semi-finished LCD products.
However, because a dramatic hike in import duties would increase costs for panel makers and weaken their pricing power, LCD companies jostled to obtain one of five licenses to produce TV panels in the world’s biggest LCD TV market last year, before the weak global economy started to take a toll on the industry.
The latest forecast from DisplaySearch now indicates that Beijing will probably hike import duties on LCD cells used by LCD panel makers in the products they export from the current 3 percent duty to 5 percent, while leaving duties on finished LCD modules unchanged at 5 percent.
The 5 percent duty “might not be big enough to drive Taiwanese and [South] Korean panel makers to build factories in China, according to our cost analysis,” DisplaySearch vice president David Hsieh (謝勤益) said on the company’s blog on Thursday.
The less-than-expected tax hikes come amid strong opposition from Chinese TV makers to any drastic increase in import duties because the tax hikes would curb imports from their major panel suppliers — Taiwanese and South Korean LCD panel makers, Hsieh said.
Taiwanese and South Korean LCD panel companies provide better quality flat panels, a more stable supply and a diverse selection compared with Chinese panel companies, Hsieh said.
Because Chinese panel makers “cannot currently provide this [wide] range of panels, raising import duties increases costs for the TV companies,” he said.
Last month, Taiwan’s two biggest LCD panel makers — Chimei Innolux Corp (奇美電子) and AU Optronics Corp (AUO, 友達光電) — accounted for 54 percent of the LCD panels bought by China’s six biggest LCD TV brands, led by Hisense Electric Co (海信) and TCL Corp and Skyworth Group (創維), according to Taipei-based research house TrendForce Corp (集邦科技).
Leading its local rivals, AUO received permission to enter the Chinese market via a joint venture, with China’s Longfei Optoelectronics Co (龍飛光電) to build an 8.5G LCD factory.
Construction of the factory was put on hold this summer after AUO incurred massive losses because of oversupply and stagnant demand. AUO posted losses of NT$40.59 billion (US$1.34 billion) in the first three quarters of this year.
Hsieh said raising import duties to 5 percent was “a compromise between Beijing’s intention to protect domestic panel makers and the cost structure of the domestic TV brands.”
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by