LCD Display Makers Compete for Orders by Slashing Quotes and Cutting Profits
April 2, 2001 (TAIPEI) -- With the continuous slide in the prices of TFT-LCD displays, Taiwanese TFT-LCD display makers have been forced to slash their quotes for the contract manufacture of these products in order to undercut their rivals and survive the surrounding carnage.
Contract manufacturing prices are expected to fall further, with no rebound foreseeable at present.
So far this year, the prices of contract manufacturing 15-inch TFT-LCD displays have fallen around 30 percent, mainly because of the sluggish TFT-LCD panel industry. The tactic of Samsung Electronics Co., Ltd. to grab short-term orders in Europe with a super low US$380 for contract manufacturing service has disturbed the flagging TFT-LCD market, heating up the price-slashing battle. Recently, a quote as low as US$300 has appeared on the market.
The situation shows how frustrated the TFT-LCD industry is. Without the precondition to find an TFT-LCD panel with a unit price of less than US$250, the contract manufacturer would not risk itself to offer a US$300 price for such a service. That provides clear evidence that TFT-LCD panel industry faces similar difficulty to TFT-LCD display contract manufacturers, and is also subject to very low quotes.
In order to retain the interest of world-class PC powerhouses believed to be considering placing larger orders to Taiwan, local TFT-LCD display makers have asked their panel suppliers to cut them on the deals for a cheaper contract manufacturing service. However, although these deals may assure their survival, they do little to increase their income, and at present TFT-LCD display makers are still living from hand to mouth.
For instance, the export quote for a 15-inch TFT-LCD display is between US$300 and US$400 per unit. The local display makers will face thin profits, after subtracting outgoing expenses for panel purchase of between US$250 and US$300 per unit, and on other needed costs.
(Commercial Times, Taiwan) |
