Thu, Jun 20, 2013 - Page 14 News List

Little effect from subsidy’s end: Innolux

CHINESE PROGRAM:The flat-panel maker expects impact from the subsidy cut to last only two to three months and demand to pick up ahead of the October holiday

By Lisa Wang  /  Staff reporter

China’s decision to end a year-long TV subsidy program is not expected to significantly cut flat-panel demand in the world’s biggest TV market, Innolux Corp (群創光電) said yesterday.

Since the 26.5 billion yuan (US$4.3 billion) subsidy program for energy-efficient home appliance purchases, which ended on May 31, failed to substantially boost demand in the Chinese TV market, ending the program is unlikely to severely undermine demand, the world’s third-largest LCD panel maker said.


“The Chinese market is different from that of Japan,” Innolux president Wang Jyh-chau (王志超) told reporters on the sidelines of the company’s annual shareholders’ meeting.

Annual sales of LCD TVs in Japan plunged to 4 million units after the expiration of a subsidy program for purchasing energy-efficient TVs, from as high as 10 million units when the program was in place, Wang said.

Despite the government subsidy for energy-saving TVs and other home appliances, annual sales of slim-screen TVs reached only about 37 million units in China, far below forecasts of 50 million to 60 million units a year, Wang said.

“The impact will only last for two or three months,” Wang said. “Demand will come back ahead of the long holiday in October.”

Global shipments of TV panels this month are expected to drop 4 percent from last month’s 20.35 million units, Taipei-based market researcher TrendForce Corp (集邦科技) said on Tuesday.

Innolux said the expiration of China’s subsidy program is not expected to significantly cut the company’s TV panel shipments as the company has been moving to 39-inch and 50-inch TV panels to differentiate it from its Chinese peers, Wang said.


Calvin Shao (邵琮淳), who tracks the LCD industry for Fubon Securities Co (富邦證券), said that inventory control by major TV brands since the Chinese subsidy was cut was a “short-term adjustment.”

“The orders for the October 1 holiday will start to pick up in late August,” Shao said in a note yesterday. “We still positively anticipate large-size TV demand for the year end as we see prices likely being much lower.”

Despite the subsidy cut, Innolux and its Taiwanese peer, AU Optronics Corp (友達光電), are better positioned than their Chinese rivals, with profits improving because of a superior product mix, Shao said.

Innolux shares closed 2.1 percent lower at NT$18.30 yesterday, Taiwan Stock Exchange data showed..

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