Shares of LCD panel makers AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創) yesterday rallied by almost the 10 percent daily limit in Taipei, one day after South Korean panel maker Samsung Display Co said it would cease all production of LCD panels by the end of this year.
Samsung Display’s exit would breathe new life into the volatile LCD industry, as the cutback in supply would help mitigate a prolonged oversupply of LCD panels, market researcher TrendForce Corp (集邦科技) said in a report yesterday.
The industry has been locked in a long-term downward spiral in panel prices due to a persistent supply glut.
The South Korean firm’s move indicates that it is speeding up production of quantum dot and organic-LED displays, a hybrid panel developed by Samsung Display, TrendForce said.
The researcher said it had expected a severe glut in the supply of monitor panels this year — similar to what happened with TV panels last year — pushing global shipments of LCD monitor panels to 1.7 million units, up 18.3 percent from 1.44 million units last year.
“Now that Samsung Display has decided to withdraw from the LCD market earlier than expected, it will help alleviate the market’s oversupply pressure,” the Taipei-based researcher said.
AUO and Innolux shares rose 9.94 percent each to NT$6.97 and NT$5.75 respectively in Taipei trading.
They have slumped more than 30 percent this year amid a gloomy outlook due to the COVID-19 pandemic.
Samsung Display’s exit might cause supply constraints regarding vertical-alignment (VA) LCD panels for monitors, as the firm is the world’s No. 1 supplier of such panels with a 35 percent market share, TrendFroce said.
AUO and China Star Optoelectronics Technology Co (華星光電) would become the world’s only two suppliers of VA monitor panels, before HKC Optoelectronics Technology Co (惠科) starts ramping up a new production line next year in China, the researcher said.
Samsung Display’s move is also expected to bring a supply-demand parity for in-plane switching LCD panels at a time when major manufacturers, including LG Display Co, BOE Group Co (京東方) and Taiwanese companies, are expanding capacity by adjusting existing equipment, TrendForce said.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
Luxury hotel Mandarin Oriental Taipei (文華東方酒店) yesterday announced that it would suspend guestroom operations and lay off related staffers from Monday, as regional border controls and travel restrictions are unlikely to be lifted anytime soon. The partial shutdown would not affect the five-star hotel’s restaurants, bars, spa, and conference and banquet facilities, which this month have almost recovered to pre-pandemic levels, it said. “Mandarin Oriental Taipei will suspend all guestroom services from June 1 due to the impact of the COVID-19 pandemic,” the hotel said after four months of maintaining normal operations proved unsustainable. The change necessitates downsizing and the hotel is handling