Chunghwa Picture Tubes Ltd (中華映管), the nation's third largest maker of TFT-LCD panels for flat computer screens, said yesterday that strong sales and rising prices should return the company to profitability this year.
The firm expects to earn NT$11.1 billion (US$317 million) this year, as sales increase by a third to NT$43.3 billion.
New orders from companies such as Apple Computer Inc, which has introduced a new iMAC with a flat-display screen, has sent the price of thin film transistor-liquid crystal display (TFT-LCD) panels up as much as US$5 per unit each month this year to the current price of roughly US$260 per standard 15-inch panel, according to analysts.
"Right now we cannot fully satisfy our customers' requirements," said Tony Chien (簡振成), spokesman for Chunghwa Picture Tubes.
Last year, the company lost NT$6.5 billion as overproduction combined with weak demand to send per-unit prices below the cost of production.
Chunghwa's first quarter results, also released yesterday, show the rebound has already fired up the company.
Revenue in the first quarter hit NT$11.79 billion, a 57 percent increase over last year, with profits soaring to NT$1.79 billion -- far higher than the NT$28.6 million the company earned last year.
Last month, the company decided to invest NT$60 billion in two new TFT-LCD plants. The company will build a new "fourth generation" plant and a state-of-the-art "fifth generation" plant in Taoyuan County's Lungtan township.
Current fourth-generation plants produce large sheets of glass from which up to six 15-inch LCD panels may be cut. The newer fifth generation plants produce much larger sheets of glass capable of being cut into 12 to 15 standard-size 15-inch screens. The newer plants are likely to be used for 17-inch and larger flat-panel computer displays as well as LCD televisions, according to analysts.
Another factor sending profits up at TFT-LCD makers is lower production costs. AU Optronics Corp (友達光電), Chi Mei Optoelectronics Corp (奇美光電), Chunghwa and HannStar Display Corp (瀚羽彩晶), the top four LCD panel makers in the nation, in order of size, are increasing the number of panels yielded from each sheet, thus lowering production costs, according to Debbie Wu, TFT-LCD industry analyst at Yuanta Core Pacific Securities Co (元大京華證券).
"This year should be a very good year for all of them, it is a total turnaround story," Wu said.
One concern some industry players have voiced is that too many new plants are being built worldwide and will send the industry back into overproduction.
Profits in the TFT-LCD panel industry have long been elusive due to rampant overproduction by South Korean, Japanese and Taiwanese firms.
Wu said that the impact of new plants on the current market situation will not be felt until next year, "so we believe the tight [supply] situation will continue throughout this year and earnings should be fantastic."
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS