Wed, Oct 09, 2013 - Page 14 News List

Taiwan’s panelmakers to face tougher competition

SOUTH KOREAN HEAT:The increased production of TV panels from South Korean manufacturers is likely to generate greater competition in the industry next year

Staff writer, with CNA

The going could get tough next year for Taiwan flat-screen suppliers who will have to confront boosted supply from Chinese and South Korean rivals, a research report said yesterday.

Market information advisory firm DisplaySearch said Chinese production lines that belong to South Korean manufacturers are preparing to ramp up production and will then be eligible for preferential tariff status, which will put the heat on Taiwanese suppliers such as AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創光電).

South Korean and Chinese firms have been focusing on the new market segment of ultra-high-definition TV panels and are set to go head-to-head with Taiwan-made panels in the global market, the report said.

The increased pressure means Innolux will have to work to protect its spot as China’s largest TV panel supplier, which DisplaySearch said it retained in August by continuing to provide a range of screen sizes from 29-inch panels to 50-inch displays.

Other Taiwanese companies, which have long been known for flexible policies targeting specific markets, could see those markets become battlegrounds if there is an increase in competition.

Market analysts said that even as competition is set to rise, Taiwan’s flat-panel sector is being hit by declining prices for TV panels with few signs of any immediate recovery.

TV panel price quotes for the third quarter fell more than 10 percent from the second quarter after China ended its year-long subsidy program for energy-efficient TVs and other home appliances on May 31, according to ViewsView, another panel market advisory firm.

ViewsView said TV panel prices are expected to fall another 10 percent in the fourth quarter.

DisplaySearch said that amid stagnant TV panel shipments, many suppliers have cut prices for 32-inch screens, the industry’s bellwether product, while large-sized TV displays, including 60-inch screens, have faced pressing price competition.

Amid concerns over panel price falls, the market fears that Innolux and Hsinchu-based AUO will record losses in the fourth quarter of this year.

Innolux, the world’s No. 4 LCD panelmaker, posted NT$0.45 in earnings per share (EPS) in the second quarter, compared with NT$0.19 in EPS recorded in the first quarter. AUO reported a net profit of NT$0.43 per share in the April to June period, compared with a NT$0.35 loss per share registered a quarter earlier.

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