The nation’s two largest liquid-crystal-display (LCD) panel makers AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子) yesterday said they have inked memorandums of understanding (MOUs) with China’s major TV vendors led by TCL Corp as demand from US and European customers dwindles amid the economic downturn.
The cross-strait tie-ups may help Taiwanese LCD panel makers in expanding their customer lineups to China, one of the world’s fastest-growing flat-panel TV markets, and lower their risk in the volatile LCD industry as well, analysts said.
On the back of the news, AU Optronics and Chi Mei stock prices jumped 3.61 percent and 3 percent to NT$24.4 and NT$10.3, respectively, outperforming the benchmark TAIEX index, which inched up 0.76 percent yesterday.
In a company filing to the Taiwan Stock Exchange yesterday, AU Optronics said it would form a strategic partnership with China’s top TV vendors via the building of a TV supply chain. AU Optronics did not provide financial details about the MOU.
Chi Mei said in a different stock exchange filing that it signed cooperation agreements with nine Chinese TV manufacturers, including TCL.
“China is certainly an important market for Chi Mei and it is one of few markets with relatively stable growth,” Chi Mei spokesman Denis Chen (陳世賢) told the Taipei Times by telphone.
The companies’ remarks followed a statement by Taiwan Affairs Office Director Wang Yi (王毅) on Dec. 21 in Shanghai that China would buy US$2 billion in flat screen monitors from Taiwanese companies.
Two local business dailies reported yesterday that AU Optronics Chairman Lee Kun-yao (李焜耀) and Chi Mei Optoelectronics Chairman Frank Liao (廖錦祥) would sign the pacts with nine Chinese companies at an industry forum in China yesterday.
The two Chinese-language newspapers — the Commercial Times and the Economic Daily News — said the nine Chinese TV makers include TCL, Haier Group (海爾), Chang-hong Electric Co (長虹電器), Konka Group Co (康佳) and Skyworth Digital Holdings Ltd (創維數碼控股).
“The purchase deal will not provide an immediate boost to Taiwanese panel suppliers in terms of shipments and revenues. But it will bring a positive impact in the long run on the back of China’s sizable TV market,” Roger Yu (游智超), who tracks the LCD industry for Polaris Securities Co (寶來證券), said yesterday.
The US$2 billion orders for Taiwanese panel makers that Beijing has promised may not look enticing at first sight as orders are expected to come in over the next three to five years, Yu said.
But the market potential in China is attractive, Yu said. Orders from Chinese customers could prove vital as they may help local firms offset reduced demand from Japanese and South Korean customers, he said.
The latest development also represents a twist in the long-term efforts made by local firms to break into the supply chain of the world’s major TV makers.
Most major Japanese and South Korean TV makers such as Sony Corp and Samsung Electronics Co have shifted production to their own factories, or their panel joint ventures for panel purchases, while cutting orders from Taiwanese suppliers, Yu said.
“China provides an alternative market for Taiwanese flat panels,” Yu said.
More than 20,000 employees at Apple Inc supplier Foxconn Technology Group’s (富士康) huge Chinese plant, mostly new hires not yet working on production lines, have left, a Foxconn source familiar with the matter said yesterday. The departures from the world’s largest iPhone factory dealt a fresh blow to the Taiwanese company, which has been grappling with strict COVID-19 restrictions that have fueled worker discontent and disrupted production ahead of Christmas and January’s Lunar New Year holiday. Concerns are mounting over Apple’s ability to deliver products for the busy holiday period as the worker unrest lingers at the Zhengzhou plant, which produces the
’INHERENT VULNERABILITIES’: The country has been working with the US to build its own lithium and rare earth mines in a bid to curb China’s dominance in the market Australia is vowing more assertive scrutiny of foreign investments in key commodities tied to electric vehicles and clean energy, in a potential warning to China which dominates the market. Australian Treasurer Jim Chalmers has asked the country’s Treasury to work with the Australian Foreign Investment Review Board and other stakeholders to undertake a review of foreign investment in sectors such as lithium and rare earths, he told a conference in Sydney yesterday. “We’ll need to be more assertive about encouraging investment that clearly aligns with our national interest in the longer term,” Chalmers said. Although Chalmers did not directly identify China investment as
FACTORY TUMULT: The departure of new workers impact production less than the quarantines imposed on existing employees, a worker at China’s ‘iPhone city’ said Turmoil at Apple Inc’s key manufacturing hub in Zhengzhou is likely to result in a production shortfall of almost 6 million iPhone Pro units this year, a person familiar with assembly operations said. The situation remains fluid at the plant and the estimate of lost production could change, the person said, asking not to be named discussing private information. Much depends on how quickly Hon Hai Precision Industry Co (鴻海精密), the Taiwanese company that operates the facility, can get people back to assembly lines after violent protests against COVID-19 restrictions. If lockdowns continue in the weeks ahead, production could be set further
HOLIDAY SEASON OMEN: Low-cost brands and high-end retailers had the most foot traffic, leaving mid-range stores struggling on what used to be their biggest sales day US retailers discounted heavily on Black Friday to clear out bloated inventories, but customers responded with only modest traffic, leaving profitability in doubt for many chains. Brick-and-mortar retailers, which were hit hard by COVID-19 closures and shoppers seeking to avoid the virus, saw in-store traffic on Friday tick up 2.9 percent from last year’s shopping event, data compiled by Sensormatic Solutions showed. US consumers are still spending, but they are growing more cautious after contending this year with the highest inflation rates in four decades. They are also keeping a sharper lookout for deals, and retailers — many of them still heavy
RSS