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Flat-panel part makers face a price downturn

Post Time:Feb 03,2009Classify:Industry NewsView:484

Makers of major flat panel components such as glass substrates could see prices drop by as much as 15 percent this quarter amid growing pressure from consumers, who have suffered the brunt of the economic downturn, a report by Taipei-based market researcher WitsView said yesterday.

With all liquid-crystal-display (LCD) panel makers posting massive quarterly losses for the fourth quarter of last year, many could attempt to cut component costs to improve their bottom line, implying that component makers could face a trying period in the first quarter of this year, WitsView said in a report.

“It will be a tough challenge for component makers to hold prices steady in the first quarter,” said WitsView, a research arm of DRAMeXchange Technology Inc.

DRAMeXchange offers real-time online price information on computer memory chips.

Makers of glass substrates could see prices fall by between 5 percent and 7 percent this quarter from last quarter as demand reduced drastically after LCD panel makers lowered equipment loading, the report said. Glass substrates represent the biggest share of the total cost of a flat panel.

Corning Inc, the world’s largest LCD glass substrate supplier, said on Tuesday it would launch a restructuring program this quarter, including a 13 percent job cut and consolidation of manufacturing facilities, after posting a 68 percent drop in net income for the final quarter of last year from the third quarter.

Corning expects the price of glass substrates to fall in the high single digit percentage in the first quarter.

Price for color filters could plunge by more than 10 percent quarter on quarter from January to March as panel makers reduce purchases from outside on falling demand, WitsView said.

Most panel makers also make color filters and other key components in their factories, or outsource components such as cold cathode florescent lamps (CCFL) from their subsidiaries to reduce the risk of supply constraint. CCFL is widely used in backlights for LCD computer screens.

AU Optronics Corp, the nation’s biggest LCD panel maker, buys CCFLs mostly from Wellypower Optronics Corp and color filters from Toppan CFI Taiwan Ltd, a joint venture between AU Optronics and Japan’s Toppan Printing Co Ltd.

AU Optronics reported record-high quarterly losses at NT$26.6 billion (US$790.3 million) in the fourth quarter last year as demand shrank amid the global economic crisis.

Prices for CCFLs are expected to fall by between 10 percent and 15 percent in the first quarter from the fourth quarter of last year, WitsView forecasts showed.

Prices for polarizers and drive-integrated circuits could drop at an 8 percent to 12 percent quarterly rate this quarter, WitsView said, citing slowing demand and excessive inventory.

Source: Taipei TimesAuthor: shangyi

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