Innolux Corp (群創) plans to further hike prices for flat panels used in mobile phones, TVs and notebook computers on the back of rebounding customer demand ahead of the electronics industry’s peak season.
However, the Miaoli County-based company’s plans come as the global LCD industry risks suffering from an oversupply in the second half of this year.
“There will be no significant improvement in the ongoing glut, even in the third quarter, which is usually a better period for the industry,” former Innolux chairman and CEO Wang Jyh-chau (王志超) said on Wednesday.
A number of panel makers are likely to see their bottom lines drift into the red soon if they cannot reduce costs to a competitive level to cope with the slump, said Wang, who now serves as a consultant to Innolux, as he is to spend more time overseeing Hon Hai Precision Industry Co’s (鴻海精密) global LCD panel manufacturing businesses.
Innolux, a flat-panel manufacturing arm of Hong Hai, last month began raising prices moderately for some TV panels, as it cannot fulfill clients’ orders, vice president for TV panels Yang Chu-hsiang (楊柱祥) said.
The firm also faces a capacity squeeze for small and medium-sized panels primarily used in mobile phones and has raised prices for such panels by a single-digit percentage this quarter due to robust demand, with plans for a steeper hike next quarter as the supply constraint might worsen, vice president Jeffrey Yang (楊弘文) said.
“We do not have sufficient capacity to handle clients’ orders,” Jeffrey Yang said. “All our production lines for small and medium-sized panels are fully utilized.”
The company does not plan to significantly expand capacity this year, he said.
However, Innolux has made efforts to improve its cost structure and technological capabilities, as well as to produce panels with added value and niche market advantages, he said.
The firm was a pioneer in offering the world’s first 4K ultra-high-definition TV panels and is prepared to roll out the world’s first mini-LED panels for TVs next year and mini-LED panels for cars in 2020, he added.
Mini-LED panels deliver better color performance with identical picture definition and are significantly more affordable than organic LED panels, Innolux said.
“The industry is plagued by a supply surplus, but Innolux, due to its ability to provide differentiated products, has seen full factory utilization,” Yang Chu-hsiang said.
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