Handset panel maker Chunghwa Picture Tubes Ltd (中華映管) plans to increase by 33 percent its shipments of higher-margin automotive displays, as the company shifts its focus to small and medium-sized panels.
The firm plans to ship 10 million units of flat panels for dashboards, head-up displays or navigation systems this year, up from the 7.5 million units it shipped last year, which were mostly for the automotive after-market.
“We have completed the first step of our business transformation,” company president Lin Sheng-chang (林盛昌) told reporters on the sidelines of an international touchpanel and optical film exhibition in Taipei.
Chunghwa Picture Tubes stopped making unprofitable LCD panels for TVs and PCs several years ago, and has shifted its manufacturing capacity to make panels for mobile devices.
Last quarter, mobile handset panels accounted for 60 percent of the company’s total revenue.
“Now we are focusing on making flat panels for cars and smartphones; automotive displays have a better profit margin,” Lin said.
Innolux Corp (群創光電), the nation’s largest LCD panel maker, last year unseated Japan Display Inc and Sharp Corp for the first time to become the world’s largest automotive panel supplier, with a 24.5 percent global market share, according to DisplaySearch.
Companies are putting an increased focus on automotive displays in order to fend off the impact of escalating competition from Chinese panel makers in the TV panel business, which is vulnerable to price wars in the battle for market share.
Chunghwa Picture Tubes has started shipping automotive displays to car brands in Japan, North America and China in the original equipment manufacturing business this year, Lin said.
About 15 percent of the company’s total automotive display shipments this year are to go to the original equipment manufacturing sector for automakers and the company aims to increase the proportion to 25 percent next year, Lin said.
Chunghwa Picture Tubes said it expects its sales of flat panels for mobile phones to drop to between 250 million and 300 million units this year, compared with 350 million devices it shipped last year.
Lin attributed the weak mobile device panel sales to high 3G inventories in China and slow uptake of 4G phones.
Half of Chunghwa Picture’s phone panels go to its Chinese handset makers including ZTE Corp (中興), Huawei Technologies Co (華為) and Coolpad (酷派).
“Demand has slumped since April,” Lin said
Chunghwa Picture is still under heavy pressure to maintain a profitable business, due to stiff price competition and severe oversupply, Lin said.
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