LCD makers continue to be plagued by sagging prices
By Faith Hung, EBN
Sep 19, 2002 (11:21 AM)
URL: ebnews.com
The beleaguered flat panel display industry sees no imminent relief from the declining prices and rising inventories that have dogged it throughout 2002.
Samsung Electronics, LG Philips LCD and AU, the top three LCD manufacturers worldwide, as well as smaller rivals are anxiously hoping for a turnaround. But there has been no sign of a pickup in demand as the Christmas shopping season approaches.
“The current trend is that TFT-LCD prices will continue to drop,” said Jeff Hsu, a vice president at Chi Mei Optoelectronics Corp., Tainan, Taiwan. “Nobody can say if the situation will improve in the December quarter. The visibility is really low.”
With demand still weak, South Korea's Samsung is expected to trigger yet another price war to boost demand, dragging down prices of the mainstream 15-in. flat panels to around $200 by October, some analysts said. Currently, the prices stand at about $210, compared with a peak of $260 earlier this year, they said.
One supplier that can least afford any price cuts is HannStar Display, which some analysts expects will probably raise less than $286 million from Taiwan's stock market later in September, well below its target of $357 million. Taoyuan-based HannStar is planning to use the proceeds to help fund its first fifth-generation facility.
The existing oversupply is expected to hit its worst level in 2004, when a total of eight fifth-generation plants in Korea and Taiwan are planned to come on line for volume production. “This is going to be a no-win situation for every supplier in the industry,” said Steven Liao, an analyst for HSBC Securities Asia Ltd., Taipei.
For now, flat panel manufacturers can only hope that LCD TV, a new application, can spur demand. When the makers can lower 30-in. LCD TV prices to $2,857, “That's the level which could be acceptable for average home users,” Liao said. Currently, many of the companies produce 20-in. LCD TVs, which are not big enough for home users, and sell them at $1,714 and $2,286, he added.
Separately, Novatek Microelectronics Corp., Ltd. denied today reports that some customers have returned its LCD driver ICs due to poor quality.
One of the world's biggest IC design houses in TFT-LCD drivers and a unit of foundry powerhouse United Microelectronics Corp., Novatek said that its major customers --- Taiwan's AU Optronics Corp. and Chunghwa Picture Tubes Co., Ltd. -- haven't rejected its shipments. Novatek's statement comes after a Taipei-based paper reported that one million ICs, or about 20% of monthly shipments, of Novatek chips have been returned.
“Our shipment is not decreasing, instead it's increasing at a steady pace,” said David Chen, a spokesman of Novatek, Hsinchu, Taiwan. “Our average selling prices have been able to remain stable since November.” |
