China’s booming slim-screen TV market used to provide a cushion and sometimes a boon for Taiwanese LCD panel makers as robust orders from China helped local suppliers steer clear of dire financial woe when the global financial crisis froze demand.
The nation’s major flat-panel maker AU Optronics Corp (AUO) still managed to eke out profits of NT$1.19 billion (US$39.3 million) during the three-year period to 2010, while Innolux Corp escaped bankruptcy, despite massive losses, but the good old days have gone. Taiwan cannot rely solely on China for growth anymore.
The latest sign is that Taiwan’s exports of precision equipment, primarily flat panels, declined annually for the 11th consecutive month to US$2.86 billion last month because of price erosion and intensifying competition in China, according to statistics released by the Ministry of Economic Affairs on Monday. Precision equipment is the nation’s third-largest export item.
Growth in China’s TV market is expected to decelerate to 1.8 percent this year to about 50 million units, from last year’s 17 percent expansion, lacking the support from Beijing’s subsidy program, according to the latest forecast by US market researcher NPD DisplaySearch.
China’s growth rate lags behind the 12 percent overall growth for emerging markets, according to the research house.
China is expected to overtake Taiwan in 2016 as the world’s biggest flat-panel manufacturing country after 16 new 8.5-generation factories are due to begin operations this year, the researcher said. By that time, Chinese TV vendors will turn to Chinese suppliers, rather than Taiwanese firms, for supplies of panels.
One of the most pressing problems faced by local manufacturers is the risk of losing market share in China, the world’s biggest TV market. Taiwan is sandwiched between China and South Korea, amid Beijing’s growing protectionism.
Chinese panel makers BOE Technology Group Co and China Star Optoelectronics Technology Co are becoming stronger rivals to Taiwanese firms, while South Korean suppliers Samsung Electronics Co and LG Display Co are expanding their capacity significantly in China, undercutting Taiwanese firms.
To vie for a better position in the market and to improve its profitability, Taiwanese company Innolux is outpacing its South Korean rivals by developing ultra-high-definition 4K2K displays, which deliver four times the definition of regular high-definition panels. The company tasted success by seizing more than 60 percent of the 4K2K TV market in China last year.
However, there is a challenge.
Samsung and LG Display are catching up and plan to ramp up production of new and more affordable 4K2K TV panels this quarter, and they are starting to supply China’s major TV brands, such as TCL Group.
The South Korean firms’ new 4K2K TV panels are competitively priced, as the panels would save TV makers about 10 percent of their costs, NPD DisplaySearch said.
Innolux is suffering the brunt of this competition in the 4K2K market in China. The company has started to feel the pinch, as it recently slashed its forecast for shipments of 4K2K TV panels this year by about 30 percent to 8.1 million units from its original forecast of 12 million units.
As the competition escalates and growth shifts to other emerging markets, such as India and Brazil, local panel makers should look beyond China and concentrate on developing high-margin niche products.
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry