Shares of Chunghwa Picture Tubes Ltd (CPT, 中華映管) surged more than 6 percent in midday trading yesterday amid renewed speculation that it was a merger target of the nation’s No. 2 LCD panel maker, AU Optronics Corp (AUO, 友達光電).
According to a Reuters report, CPT was in merger talks with AU Optronics, which if successful, would put AU Optronics back in the third spot in the global LCD industry.
AU Optronics’ world ranking dropped to No. 4 after a three-way merger in March led to the formation of Chimei Innolux Corp (奇美電子).
The merger talks rekindled CPT investors’ hope that they could get rid of the unprofitable stock, said Roger Yu (游智超), a flat panel industry analyst with Polaris Securities Co (寶來證券).
The company’s past efforts to seek a strategic or equity investor have failed, Yu said.
CPT have reported cumulative losses of NT$67.77 billion (US$2.2 billion) over the past nine quarters as it became more vulnerable to the industry’s ups and downs compared with its bigger rivals because it has less flexibility in shifting capacity to make panels whose prices are less subject to price swings.
However, Yu was skeptical of a merger.
“There is no reason for AU Optronics to initiate an M&A [merger and acquisition] deal to expand capacity [in Taiwan] at the moment,” Yu said. “We will only get excited when AU Optronics receives government approval to invest in China.”
In March, AU Optronics submitted a proposal to invest US$3 billion to build a 7.5-generation fab in China to make LCD TV panels. The company hopes to mass produce panels from its first Chinese plant in 2012. The proposal is still under government review.
“Such speculation [on a merger] has been circulating again and again. We have no comment on that,” AU Optronics spokesperson Hsiao Ya-wen (蕭雅文) said by telephone.
AU Optronics has said that its priority now is boosting the value, or margins, of its products, rather than expanding capacity.
Chunghwa Picture said in a filing to the Taiwan Stock Exchange that the “company will not rule out the possibility of cooperating with peers and companies in the [LCD] supply chain industry, but it has no substantial plan, or conclusion yet.”
AU Optronics shares plunged 1.65 percent to NT$29.75 yesterday, while the benchmark index declined 1.43 percent.
CPT shares retreated from an intraday high to close up 3.65 percent at NT$4.54.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective