AU Optronics Corp (AUO, 友達光電) and LG Display Co (LGD) might consider investing in low-cost G10.5 fabs to produce 65-inch and 75-inch LCD TV panels to capitalize on the increasing demand for big-screen TVs, IHS Markit said.
That would also elevate the competition in the global LCD panel industry to a new level, as only Chinese flat-panel makers are spending lavish funds on building G10.5 fabs, the market researcher said on Thursday.
FOUR NEW PLANTS
Four G10.5 plants are expected to enter operation in 2019 or 2020 in China, including those owned by BOE Technology Group (京東方) and China Star Optoelectronics Technology Co (華星光電), IHS Markit analyst David Hsieh (謝勤益) told reporters on the sidelines of an annual display forum in Taipei.
By the end of 2019, China is expected to control 45 percent of the world’s flat-panel market, while Taiwan and South Korea will have a 23 percent and 26 percent share respectively, the research house said.
“Chinese companies are targeting jumbo-size 65-inch and 75-inch TV panels,” Hsieh said. “However, the investment and consumption of resources are enormous, while technological barriers are high.”
A G10.5 production line would cost US$5.8 billion and would require 445 hectares of land, Hsieh said.
In comparison, a low-cost G10.5 production line would cost only about US$3 billion, or half of the amount required for a G10.5 line, he said.
For cost-sensitive companies like AUO, it will be an optimal choice, Hsieh said.
“AUO and LGD are considering building low-cost G10.5 lines to expand capacity, as demand for 65-inch panels is high,” he said.
AUO, Innolux Corp (群創), LG Display and Samsung Electronics Co are the world’s major suppliers of 65-inch TV panels, according to IHS Markit.
Hsieh said TV panel prices are to slide next quarter, snapping the longest streak of price increases in the industry’s history.
TV set makers have stockpiled large inventories due to concerns of supply constraints, he said.
TIGHT SUPPLY
Prices for most TV panels this month are generally flat from last month, according to IHS Markit.
Prices for 50-inch and 65-inch TV panels rose only between US$2 and US$5 per unit due to tight supply, it said.
However, Hsieh said he does not expect panel prices to collapse any time soon, as demand will outstrip supply by 5 percent.
“Supply will continue to be tight this year,” he said.
IHS Markit said it expects panel prices to remain stable this quarter, and the price trend in the second half of the year would depend on inventory digestion and shipments, as new capacity additions are not expected to be significant.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Taiwan has enough crude oil reserves for more than 100 days and sufficient natural gas reserves for more than 11 days, both above the regulatory safety requirement, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, adding that the government would prioritize domestic price stability as conflicts in the Middle East continue. Overall, energy supply for this month is secure, and the government is continuing efforts to ensure sufficient supply for next month, Kung told reporters after meeting with representatives from business groups at the ministry in Taipei. The ministry has been holding daily cross-ministry meetings at the Executive Yuan to ensure
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
RSS