Mon, Apr 09, 2012 - Page 12 News List

China LCD tariff hikes unlikely to hit Taiwan firms

NO RELOCATION YET:China is the world’s largest LCD TV market, and Taiwanese firms are the biggest suppliers of the panels they use

Staff writer, with CNA

China’s recent increase in import tariffs is not likely to have much effect on Taiwanese flat-panel makers, as it will not impose a heavy financial burden on them, according to a recent report.

China’s Ministry of Finance has imposed higher import duties on certain products, including LCD TV panels, with effect from April 1, according to a DisplaySearch report.

The duty on TV panels 32 inches and larger has been increased from 3 percent to 5 percent to protect China’s fledgling panel industry, the market research firm said.

“Based on our cost analysis, the increase of 2 percentage points might not be big enough to force South Korean and Taiwanese panel makers to build fabs [semiconductor fabrication plants] in China,” Zhang Bing (張兵), a research director of DisplaySearch’s China market, said in the report.

However, if domestic suppliers build more LCD TV panel fabs as planned, the import duty might be increased further, forcing foreign panel makers to seriously consider building LCD fabs in China, Zhang said.

Regarding overcapacity in the industry, he said it is now possible that panel makers in Taiwan, Japan and South Korea might “move” existing fabs to China instead of building new ones.

China is the world’s largest LCD TV market, but there is very harsh competition among its domestic brands, the report said.

These account for more than 70 percent of the market since consumer behavior and channel structures make it very difficult for international brands to expand their share, according to the report.

In February, LCD TV panel shipments for use in Chinese brands totaled 3.75 million units, up 18 percent from January, the report said.

However, the panel shipments are forecast to decline 13 percent month-on-month next month and 8 percent in June after Chinese TV brands end their inventory restocking for week-long holidays in May, the report said.

Zhang forecast that Chimei Innolux Corp (奇美電子) will continue to lead panel shipments for Chinese TV brands in the next few months, as the Taiwanese flat-panel maker has adjusted its monthly shipments in line with demand in the China market and has raised its shipment targets in the near term.

According to market intelligence firm WitsView, Chimei Innolux remained the top panel supplier to the six major television brands in China in February, with a 32 percent market share, while another Taiwanese firm, AU Optronics Corp (友達光電), ranked second with 22 percent.

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