Share prices of the nation’s major LCD panel makers, Chimei Innolux Corp (奇美電子) and AU Optronics Corp (AUO, 友達光電), gained yesterday on speculation that Sony Corp would buy more panels from them next year after exiting an LCD manufacturing venture with Samsung Electronics Co.
Chimei shares climbed 1.18 percent to NT$12.9, their highest level since Dec. 7, while AU Optonics rose 0.37 percent to NT$13.6, the highest since Dec. 9, Taiwan Stock Exchange data showed. Those contrasted with a decline of 0.11 percent on the benchmark TAIEX.
Sony and Samsung formed a LCD joint venture, S-LCD Corp, in 2004, as the two leading TV makers wanted to secure a stable supply of flat panels. On Monday, Sony announced it would sell its 50 percent stake in S-LCD to Samsung for 1.08 trillion won (US$932.4 million), a deal that is expected to be completed by Jan. 19.
“We believe both AUO and Chimei will be the major beneficiaries of the potential order shift from S-LCD in 2012, especially for larger-sized 40 inch TV [panels],” said Jerry Su (蘇厚合), an LCD industry analyst with Credit Suisse, in a research note yesterday. “Chimei could benefit more, given its long-term relationships with Japanese TV brands and Hon Hai Group’s (鴻海集團) strength.”
Hon Hai Precision Industry Co (鴻海精密), the group’s flagship company and a stakeholder in Chimei, assembles LCD TVs for Sony.
While Samsung would remain an important LCD panel supplier for Sony, Chimei and AU Optronics are expected to gradually increase their shares of overall LCD panels consumed by the Japanese electronics giant to as high as 25 percent each, from at least 15 percent, Su said.
US market researcher DisplaySearch, however, expected the effect to magnify at a later date in 2013.
Sony would start diversifying its panel suppliers from 2013, as the Japanese TV maker has signed a panel supply contract with Samsung to purchase 57 percent of the panels it plans to use next year from the South Korean company, the Austin, Texas-based researcher said in a report.
Sony targeted shipping 21 million units of LCD TVs this year, but the Japanese brand is expected to cut its shipment target for next year to about 20 million units from the 22 million units set previously, DisplaySearch said.
Credit Suisse said local contract electronics makers would also benefit from the growing trend of Japanese TV brands outsourcing production as the companies seek to trim costs amid an appreciating yen.
Hon Hai, Wistron Corp (緯創) and Compal Electronics Inc (仁寶) would benefit from this trend as TV makers, such as Sony, Toshiba, Panasonic Corp, Sharp and Funai Electric, are expected to outsource more production, Su said in the note.
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