The board of Taiwan's No.2 flat panel maker Chi Mei Optoelec-tronics Corp (
Chi Mei Optoelectronics said it will invest US$30 million in the Ningbo-based Chi Mei Optoelectronics (Ningbo) (
Chi Mei Optoelectronics has subcontracted the assembly of LCD screen modules to the Chinese company.
"The investment will boost our cost efficiency in the long run. We expect the effect to surface in the second quarter of next year," said Eddie Chen (
Chi Mei Optoelectronics, which has a 20-percent share of the world's LCD-TV panel market, supplies screens mostly to Japanese TV vendors.
LCD panel makers are trying every effort including building labor-intensive module assembly plants in China to cut costs and maintain profitability in the face of price erosion and stiff competition.
Chi Mei Optoelectronics is the only firm among the nation's five major slim-screen makers -- which also include AU Optronics Corp (
With the latest Chinese investment, Chi Mei Optoelectronics will get a 50-percent controlling stake in Chi Mei Optoelectronics (Ningbo) after recapitalization is complete.
Chi Mei Optoelectronics said it planned to acquire a bigger stake in the company next year.
The Chinese LCD module assembly plant will expand its capital to US$54 million from the current US$24 million, after selling new shares worth US$30 million to Chi Mei Optoelectronics, according to the company's statement.
"We will speed up our `go West' policy as we have deeply felt the adverse impact of having no assembly lines in China on our competitiveness. That will help us save more costs," Chi Mei Optoelectronics president Ho Jau-yang (
Chi Mei Optoelectronics aims to lower costs by 5 percent this quarter from the third quarter, Ho said.
"The Chinese investment will give Chi Mei Optoelectronics greater flexibility in cost reduction," said Ben Lee (
China-based assembly factories save local flat-panel makers US$1 to US$2 per panel, according to Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘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
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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