Flat-panel display makers were among the biggest borrowers in Asia last week as they sought a combined US$1.75 billion in loans to boost production amid growing demand for televisions and computers that use the screens.
Chunghwa Picture Tubes Ltd (中華映管), the country's No. 3 flat-panel display maker, wants to raise up to NT$33 billion (US$990 million) for a NT$90 billion project that is expected to bring in an additional US$10 billion in sales a year when completed in 2006.
InnoLux Display Corp (群創光電), a unit of Hon Hai Precision Industry Co (鴻海精密), last week signed a NT$20 billion loan to make more thin-film-transistor liquid-crystal display monitors.
TPV Technology Ltd, the world's No. 4 maker of flat-panel screens, increased a loan by 60 percent to US$160 million to step up production and refinance debt.
"We are raising funds now for the expansion because we want to secure at all cost the personal computer market, which forms the foundation of our TFT-LCD business," said James Wu (巫俊毅), chief financial officer of Chunghwa Picture Tubes.
"It is also getting us ready for the expected takeoff of demand from the TV market in the second half of 2005," he said.
Orders for Chunghwa Picture Tubes' TFT-LCD screens more than doubled so far this year compared with same period last year to 1.7 million units, he said.
The LCD-related transactions from Taiwan are more competitively priced compared with recent ones from South Korean producers, mainly because there is more money available for lending in Taiwan, bankers said.
"These transactions are very much driven by liquidity," said Kevin Tham, head of loan distribution and syndicate in Asia at ABN Amro Holding NV.
"The local liquidity among Tai-wanese banks is much stronger than in Korea, so Taiwan has been a relatively tighter market in terms of pricing," he said.
Chunghwa Picture may pay an interest margin of about 70 basis points more than Taiwan's 90-day primary commercial paper rate -- currently 1.14 percent -- for the new loan. It is paying 80 to 90 basis points more than that rate for a NT$19 billion seven-year credit set up in 2001, Wu said.
InnoLux is paying a margin of 86.5 basis points more than the 90-day commercial paper secondary market, or trading, rate, currently 1 percent. A basis point is 0.01 percentage point.
LG.Philips LCD Co, a venture between South Korea's LG Electronics and Royal Philips Electronics NV, pays 1.2 percentage points over Libor for a three-year US$400 million credit maturing in 2006. Three-month dollar Libor (London interbank offered rate) is 1.11 percent.
Hong Kong-based TPV received offers of more than US$200 million for its credit that yields 95 basis points over Libor (London interbank offered rate).
InnoLux's loan was increased from NT$18 billion due to strong demand from banks.
Flat screens will overtake cathode ray tubes in personal computer monitors for the first time in the second quarter this year, Texas-based researcher DisplaySearch said last month. The flat-panel industry will grow this year by a fifth to US$44.5 billion, the researcher said in a forecast last year.
Taiwan-based manufacturers will account for 49 percent of the US$9.4 billion in global spending on LCD-making equipment this year, compared with 27 percent by South Korean makers.
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