Fri, Mar 03, 2006 page11

• Outsourcing to benefit Taiwan

  LCD TVS Already the world's second-largest maker of slim-screen TVs, the country's manufacturers will be making more smaller, entry-level models for Japanese firms

  • By Lisa Wang / STAFF REPORTER
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  Taiwanese manufacturers are expected to supply a third of the world's liquid-crystal-display (LCD) TVs this year as Japanese brands such as Sharp Corp are increasing outsourcing of production to cut costs amid intensifying competition, a Taipei-based market researcher said yesterday.

  Last year, one out of four LCD TVs sold around the globe was made by local firms no matter what brand it carried, making Taiwan the second-largest slim-screen TV maker, Market Intelligence Center (MIC, 資訊市場情報中心) said.

  "The percentage will rise further this year as the world's big TV brands are forced to farm out more production overseas to save costs and cope with price wars," said MIC analyst Annabelle Hsu (徐美雯).

  According to MIC, Sharp plans to roll out low-price TVs to safeguard its turf after rival Sony Corp overtook it as the world's top TV vendor last quarter, helped by its sub-brand Bravia, which was launched last summer.

  To compete in the fast-growing LCD TV market, Japanese TV vendors would focusing on making high-end models, while farming out production of entry-level models, or TVs with 20-inch or smaller screens, overseas, Hsu said.

  "Taiwanese firms are their [the Japanese] first pick because of their strong cost-saving capabilities, benefiting from lower-priced LCD panels and chips from Taiwanese suppliers," Hsu said.

  The potential opportunity would be the major factor fueling substantial growth for local companies this year, she said.

  According to MIC, Taiwanese manufacturers, such as LCD monitor maker Amtran Technology Co (瑞軒) and notebook computer maker Quanta Computer Inc (廣達電腦), have been making flat-panel TVs for well-known brands, including Sony and computer giant Dell Inc, as well as less familiar channel brands.

  This year, Sony and Sharp are expected to increase their orders, while Matsushita Electric Industrial Co, which sells consumer electronics products under the Panasonic brand, is expected to be added to the customer list of local firms, Hsu said.

  Benefiting from the outsourcing trend, Taiwanese firms' LCD TV sales are expected to more than double to 11.35 million units this year from 5 million last year, Hsu said.

  That would make up about 31 percent of 36.48 million LCD TVs to be sold around the world this year, according to MIC's forecast, up from 25 percent.

  "The 5 percentage point expansion is great progress," Hsu said.

  Market research firm ISuppli Corp has forecast that global shipments of LCD TVs will rise 60 percent to 31.4 million units this year.

  Despite the cost-saving advantage, Hsu warned that Eastern European TV makers could pose a threat to local firms in the future.

  "Eastern European companies enjoy the advantage of supplying TVs at a lower rate for their customers in the eurozone because of the tariff exemption on TVs," Hsu said.

  Only a few local firms own factories in Eastern Europe because of the limited orders from customers for that area, MIC said.
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