US and Europe debt crisis impacts flat-panel makers

REDUCED DEMAND::Flat-panel and component makers saw falls in revenue on the back of lower demand due to anxiety over the US and European debt problems

By Lisa Wang  /  Staff reporter

Sat, Feb 23, 2013 - Page 14

Revenues from local flat-panel and component makers grew by a smaller-than-expected 4.42 percent sequentially as uncertainty about debt problems in the US and Europe curtailed demand. However, growth is expected to gain momentum this year, boosted by new products and technology, a local market research house said yesterday.

Revenue expanded to NT$387.04 billion (US$13.1 billion) last quarter, from the third quarter’s NT$370.67 billion, according to the tally by Industry and Technology Intelligence Services (ITIS). The figure was smaller than the NT$396.97 billion and a 7.1 percent quarterly expansion estimated by the Hsinchu-based research house.

“We did not see strong seasonal demand fully reflected in [panel] sales,” ITIS analyst Nancy Liu (劉美君) said on the telephone yesterday. “Demand plunged after the Black Friday sales season. A wobbling macroeconomy has curbed consumer purchasing again.”

The industry is expected to resume growth later this year, Liu said.

This quarter, total revenues are expected to increase 18.8 percent year-on-year, a slight 4.59 percent quarterly decline, to NT$369.26 billion, she said.

“We are seeing panel prices stabilizing this quarter,” Liu said.

The prices for the LCD panels, used in televisions, edged down by 1 percent to 2 percent from two weeks ago in the second half of this month as demand slowed, according to a tally by another researcher, NPD DisplaySearch. The prices for monitors and notebook computers also slid by 1 percent to 3 percent, according to the US researcher.

The nation’s two biggest LCD panel makers, Innolux Corp (群創光電) and AU Optronics Corp (友達光電), reported a monthly decline of 11.3 percent and 10.8 percent in revenue for last month to NT$39.33 billion and NT$28.6 billion, respectively.

For the full year, Liu expected total revenues from local makers of LCD panels and components to grow 16.9 percent to NT$1.61 trillion from last year’s lukewarm NT$1.29 trillion, after an annual decline of 7.86 percent.

“LCD panel makers are trying to stimulate demand by launching products made with new ultra-high-resolution 4k2K panels for sophisticated markets and by providing new sizes of TV panels to woo demand in emerging markets,” Liu said, adding that last year’s base was low.

Revenues from slim screens used in tablets and mobile phones would outpace those for TVs and PCs, thanks to robust demand for consumer electronics, which usually enjoyed a shorter life cycle, Liu said.

Revenues for mobile device panels would grow 8.5 percent annually, faster than the 7.8 percent increase for TV and PC panels, Liu said.

“This year, the growth will be driven jointly by big and small slim screens. TV screens will no longer be the major driving force as in the past,” she said.

By technology, revenues from new OLED panels, which provide higher resolutions than LCD panels, would expand 68 percent to NT$10.9 billion this year from NT$6.49 billion last year, according to Liu’s projection.