Large Sized TFT-LCD Panels

Tseng Cun-chou
July 2013
TIER Industry Report - Large Sized TFT-LCD Panels;7/15/2013, p1
Industry Profile
Industry Report
* Output and Sales: With a strict control of capacity and an improvement in demand, Taiwan's production and sales values of large-sized TFT-LCD panel industry rose by over 10 percent year-on-year in the second quarter of 2013. However, the value of inventories would exceed 20 percent due to fierce competition from China and South Korea, a real challenge for the industry development in Taiwan. * Prices: With an improvement in the supply-demand structure and an increase in the sales ratio of liquid crystal television panels, prices of large-sized TFT-LCD panels have risen since the second half of 2012. On the other hand, because of a shift in the production, the supply-demand structure of 18.5-inch liquid crystal display panels improved. As a consequence, tprices have begun to rise since April 2013, suggesting an improvement in the prices of the products of the industry. * Investment in China: Despite an improvement in the industry business climate, Chinese panel makers increase production, exerting pressure on Taiwanese panel manufacturers in China. At the same, time Korean and Japanese firms are also active in developing the China market. As a consequence, the operating performances of Taiwanese firms such as AU Optronics Corporation and Innolux Corporation were poor in the first quarter of 2013, with the former operating at a loss and the latter seeing a 45.63 percent drop in the revenue. * Operating Performance: The revenues of AU Optronics Corporation and Innolux Corporation improved a great deal in the first quarter of 2013, thanks to a pick-up in the business climate, product prices and the product mix. Innolux Corporation turned loss into profit, putting an end to for ten consecutive quarters a loss. Meanwhile, AU Optronics Corporation's display panel unit also turned loss into profit, suggesting an improvement in the operating environment. The upward trend will continue into the second quarter of 2013 and boost net profits. * Industry Dynamics: On July 27, 2013, Sharp signed a cooperative agreement with CEC Group of China to transfer IGZO technology to CEC's subsidiary China Electronics Panda Group Corporation. The move will help boost China's panel technology. At the same time, China gradually increased tariff on imports of panels, which would gradually diminish the competitive edge of Taiwanese panel firms in China and have a detrimental impact on their operations. * Industry Outlook: The industry will see a slight growth in the second half of 2013, thanks to an improvement in the supply-demand structure and product mix, increased production of niche products and efficient cost controls which boost profit margin. However, the imbalance in the supply-demand structure will occur in the final quarter of quarter of 2013, suggesting growth will ease from a quarter earlier.



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