The stock price of the nation’s top LCD panel maker, Innolux Corp (群創), jumped 1.33 percent yesterday after China pledged to buy US$4.5 billion worth of TV panels from Taiwanese manufacturers this year.
Innolux is the biggest TV panel supplier to China’s major TV brands.
China Video Industry Association deputy director Bai Weimin (白為民) on Thursday said Chinese buyers are expected to place orders for between 27 million and 28 million flat panels this year, up from 23 million TV panels last year.
Chinese TV makers are expected to buy mostly 40-inch and 43-inch TV panels and ultra-high-definition 4K TV panels, market watcher WitsView, the LCD research arm of TrendForce Corp (集邦科技), said.
“Given that most of China’s panel capacity is in 8.5-generation [8.5G] production lines, it is necessary for Chinese firms to place orders in Taiwan for various sizes of TV panels to meet domestic demand,” WitsView analyst Eric Chiou (邱宇彬) said by telephone, adding that Taiwanese manufacturers’ diversified production lines are capable of providing multiple TV panel sizes.
Market Intelligence and Consulting Institute (MIC, 資策會產業情報研究所) analyst Brian Chen (陳彥合) shared a similar view with Chiou, saying that, although Chinese manufacturers have been increasing their production capacity, they are still not capable of producing 58-inch or 60-inch panels like Innolux due to a lack of 7.5-generation production lines.
“One of Taiwanese panel makers’ advantages is that they have three different generation production lines, which can supply a wide range of TV panel sizes,” Chen told the Taipei Times.
Commenting on China’s planned orders with Taiwan this year, Chiou said purchases might include growing orders for 4K TV panels.
Chiou forecasts the global 4K TV penetration rate to reach 15.6 percent this year, with China’s penetration rate to outpace global demand.
“As of May 1, China’s 4K TV penetration reached 30 percent, and the figure could continue to increase this year,” Chiou said, noting that China’s strong demand for 4K panels could benefit Taiwanese manufacturers, as the Chinese 4K product yield rate is still insufficient.
Chiou commented on China’s increasing production capacity, saying that he expects China’s two new 8.5G production lines to be fully operational in the fourth quarter of this year at the earliest, affecting supply and demand.
The stock price of AU Optronics Corp (AUO, 友達光電) dropped 0.59 percent to NT$16.85 on the local local bourse yesterday, underperforming the TAIEX, which lost 0.12 percent.
AUO’s TV panel demand remains stable, with healthy order visibility through June, Macquarie Research said in a note on May 22.
Macquarie said it foresees AUO’s clients increasing orders for 4K and 2K-resolution panels at larger sizes such as 55 inches and 65 inches in the second half of this year.
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