Innolux Corp (群創光電), the nation’s top LCD panel maker, yesterday said its factory utilization rates would likely dip next quarter from the current 90 percent level as demand tends to slacken after the New Year holiday shopping season draws to a close in China, the world’s largest TV market.
Innolux, previously known as Chimei Innolux Corp (奇美電子), said it has maintained a high equipment loading rate mostly because of its success in developing new TV panels such as 39-inch and 50-inch screens and boosting demand for its TV screens.
“As TV panels are bigger [than screens for other devices], these products have contributed to higher output and helped lift factory utilization rates [over the past several months],” Innolux chairman Tuan Hsing-chien (段行建) said yesterday.
“But it is difficult [to keep machines running in high gear] in the first quarter,” Tuan said.
China’s new subsidies on energy-efficient TVs have helped stimulate demand for large flat-screen televisions and boosted panel makers’ factory utilization levels to about 80 percent in the second half of this year from as low as 70 percent in the first half, TrendForce Corp (集邦科技) said in a report released on Monday.
However, the Taipei-based researcher warned that a new period of oversupply was looming after demand peaked over the US’ and Chinese holiday seasons, and it forecast supply would exceed demand by 12 percent next quarter if panel makers kept their factory utilization rates at the current 80 percent level.
“The ‘crystal cycle’ is still here [determining the industry’s ups and downs] … The first quarter is a slow season for the LCD industry based on its track record. I do not expect any major problems to occur,” Innolux president Wang Jyh-chau (王志超) said.
“We will have to wait for a new-wave of strong demand in April or May when TV brands launch new models in Europe and [ahead of] the Labor Day holiday shopping season in China,” Wang said.
“Next year will be a much better period than this year as the world’s major panel makers do not plan to increase capacity massively,” Wang said,
Demand for TV panels and tablets screens would be strong next year, while demand would likely be weak from the notebook computer segment, Tuan said.
Separately, Innolux yesterday said it expected to complete a new share sale — in the form of global depositary receipts — by the end of next month as scheduled, after raising NT$5.4 billion (US$185 million) earlier this year.
The company plans to raise as much as NT$1.125 billion from the stock issue, rather than the previously forecast amount of NT$1.625 billion, as it generated more cash from operations and reduced its losses.
The company also said it has reached a consensus with its creditor banks regarding its fund-raising programs, dismissing a report in the Chinese-language Commercial Times that the banks were worried that Innolux would break its promise to raise NT$20 billion by the year-end as part of requests to creditors to extend NT$240 billion in loans.