Chi Mei Optoelectronics (
The maker of TFT-LCD panels said yesterday that pre-tax earnings this year would rise to NT$11.1 billion, on revenue of NT$54.2 billion.
The company last month forecast that earnings would come in at NT$3.2 billion on sales of NT$49.5 billion.
"We had less confidence in pricing [in the fourth quarter] when we made our original forecast," said Eddie Chen (陳彥松), head of Chi Mei's finance department.
Chen said that per-panel prices have risen substantially, but declined to provide estimates of how high Chi Mei expects prices to go.
The price of a standard, 15-inch LCD panel currently fetches about US$260, up from around US$200 at the beginning of the year.
According to the Digitimes Web site, LCD panels made for notebook computers are commanding around US$300 per panel today and could rise to US$315 next month.
Chen yesterday also said his company has yet to finalize cost projections for its latest 5th generation TFT-LCD production plant. Earlier reports have put the cost of the plant between NT$40 billion and NT$52.5 billion.
Consumers have been snapping up flat-panel LCD screens for their new computers, preferring their smaller size and better resolution to traditional bulky cathode ray tube monitors.
Based on the company's forecast, Chi Mei could end the year as the nation's second-largest TFT-LCD panel producer based on revenue.
AU Optronics Corp (
Last year, both companies were bleeding red as low demand and a capacity glut hurt profits. Chi Mei lost NT$3.6 billion and AU Optronics lost NT$6.7 billion.
It wasn't until the fourth quarter of last year that the market began to significantly shift from inexpensive CRT monitors to sleek LCD screens.
After three consecutive quarters of losses, Chi Mei and AU Optronics returned to profitability in the first quarter of this year.
Still, while good times have returned for makers of TFT-LCD panels, analysts say the industry faces dangers from over-production that are similar to the market for commodity memory chips.
Basically, as prices go up, companies tend to over-invest in new production facilities, leading to a glut in capacity and -- eventually -- lower prices and losses.
Many companies have plans to build new production lines scheduled to come online in the second quarter of next year -- which could dash hopes for consecutive profitable years for the industry, according to an analyst who requested anonymity.
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