| Prime News | | ![]() | ![]() | Acer Announces Takeover of Gateway at US$710 M.
Taipei, Aug. 28, 2007 (CENS)--J.T. Wang, chairman of Acer Inc., announced yesterday (Aug. 27) the firm's 100% acquisition of Gateway Inc., the fourth largest PC vendor in the U.S., at US$710 million, thereby consolidating its status as the world's third largest PC vendor, ahead of China's Lenovo.
Both parties have entered a definitive agreement for the deal, with purchase price set at US$1.9 per share, representing 57% premium over Gateway's closing price of US$1.2 last Friday. Following the merger, Acer's revenue is expected to top US$15 billion in 2008, up from 2006's US$11.3 billion, with PC shipment volume exceeding 20 million units, enabling it to enjoy a comfortable lead over its closest rival Lenovo.
The deal will also enable Acer to finalize its takeover of Packard Bell, a leading European PC vendor, warding off a rivaling bid from Lenovo, as Gateway announced early on its decision to exercise right of first refusal to acquire the European brand.
J.T. Wang remarked that "The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our U.S. presence. This is will be an excellent addition to Acer's already strong position in Europe and Asia." Wang noted that the acquisition will raise Acer's global market share to near 10%, trailing only HP and Dell.
Some local observers, though, questioned the merit of the takeover, pointing to the high premium and Gateway's lackluster performance in recent years. In reflection of the reservation, Acer's share price slipped NT$1.2 closing at NT$63.6 yesterday.
Gateway racked up revenue of US$3.9 billion in 2006, with profit reaching only US$9.6 million. It suffered US$6.7 million of red ink in the first half of 2007, with market share slipping to 5.6% in the second quarter, compared with 6.5% a year earlier. Its U.S. market share is still higher than Acer's 5.2%, though.
Tu Ying-chung, chairman of Smith Barney's Taipei branch, Citigroup, financial consultant to Acer in the deal, however, pointed out that the acquisition price is only 4% lower than Gateway's average share price over the past six months and the deal will help Acer boost its revenue to US$20 billion in two years, leading to US$150 million savings in procurement cost annually.
The deal will be the largest acquisition in the history of Acer, which has relied to litany of takeovers to accelerate its development over the past years, including takeover of TI's PC department, which helped Acer establish its presence in the European market.
Acer's consolidated revenue advanced 23.9% year-on-year to NT$193 billion in the first half of 2007, with after-tax net profit reaching NT$7.65 billion, or NT$3.23 per share, higher than NT$3.09 a year earlier.
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| | ![]() | | | Foxconn Triggering Investment Craze in Qinghuangdao
Taipei, Aug. 28, 2007 (CENS)--Hefty investment by Foxconn Group, the Chinese affiliate of Hon Hai Precision Group, has sparked an investment craze in the coastal city of Hebei Province, as many of the group's supporting factories are following its step to set up operations there.
A local Taiwanese businessman revealed that a delegation of representatives of 160 Foxconn supporting factories visited Qinghuangdao in early August, studying the city's investment environment.
Foxconn will invest US$1 billion over the next three years in the Foxconn Hi-Tech Park, spanning three square kilometers in space, situated in the western area of Qinghuangdao Economic and Technology Development Zone (QETDZ). In addition, according to its agreement with Qinghuangdao city government, Foxconn will set up a branch nano-tech R&D centerand a PCB (printed circuit board) R&D center in Beidaihe, a famous coastal resort near Qinghuangdao.
Liu Hung-zhu, director of the Investment Promotion Bureau of QETDZ, pointed out that the Hebei provincial government will give the most preferential conditions to the Foxconn project, the largest sci-tech project in the province, which will create 35,000 job vacancies.
The investment project will further boost Foxconn's prominent presence in the Chinese market. At of the end of July this year, Foxconn boasted employment of 530,000. For the fifth year running, it was the largest exporter in China in 2006, with its exports accounting for one twenty-seventh of the nation's total overseas sale. Its Shenzhen factory alone accounted for 30% of the city's total exports.
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| | ![]() | | | Campro Breaks Ground on New Office/plant Building in Taichung
Taipei, Aug. 28, 2007 (CENS)--With a total investment of NT$100 million (US$3.03 million at US$1:NT$32.9), Campro Precision Machinery Co., Ltd., one of Taiwan's professional manufacturers of machining centers, recently broke ground on a new office/plant building in Taichung Precision Machinery Industrial Park of central Taiwan.
Occupying a land area of 108,000 square feet, the new office/plant building will be constructed according to international standards. After the new building is completed at the end of 2008, the company will be able to challenge annual sales of NT$2 billion (US$60.79 million).
Tsai Ching-tse, president of the company, noted that his company has been fully utilizing production capacity in the Taichung plant. After the new office/plant building is completed, the company will be able to see annual output reach 1,200 units of CNC (computerized numerically controlled) lathes and machining centers.
Founded in 2003 in Taichung City, Campro is a young company with a highly experienced management team. The company specializes in the development and production of CNC horizontal lathes, CNC vertical machining centers and other kinds of machine tools at two factories on each sides of the Taiwan Strait.
Campro currently offers four models of CNC horizontal lathes and seven models of CNC vertical machining centers, said Tsai. Unit price of the company's CNC machine tools is as much as US$55,000.
The company recently unveiled three new models: CQV high-performance vertical machining center), CMV (high-speed mold making vertical machining center), and CPL (slant-bed type CNC precision lathe). These models offer top performance and can obviously increase the competitive advantage of its clients.
The company's CQV-series high-performance vertical machining center, equipped with spindle of 10,000rpm, features 1100x560x 560mm in X, Y, Z-axis travel. Distance from spindle nose to table surface ranges from 110mm up to 670mm and that from spindle center to column surface reaches 630mm.
The base of the machine is reinforced by A-type rib layout to upgrade shock absorption capability and is constructed of a box-type structure for excellent rigidity. The machine structure is designed via Finite Element Analysis (FEA) and advanced three-dimensional software. Counter-balance system of the machine is equipped with a guide rail for increasing stability, avoiding vibration during high feed rate or rapid traverse to ensure machining accuracy.
The company said it has begun shipping PRO-2060 CNC column-moving machining centers, which are developed with the technical transfer from a German manufacturer, since the beginning of the third quarter of this year.
Tsai noted the PRO-2060 machining centers are mainly supplied to the German technical partner. In addition to the German market, the machines will be also exported worldwide. The company said it has also developed PRO-3060 models of machining centers to meet specific demand from customers around the world.
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| | ![]() | | | FPG's Four Major Subsidiaries Posted NT$100B. in Earnings for First Half
Taipei, Aug. 28, 2007 (CENS)--The four subsidiaries of Formosa Plastics Group (FPG), including Formosa Plastics Corp. (FPC), Nan Ya Plastics Corp. (Nan Ya Plastics), Formosa Chemical & Fibre Corp. (FCFC) and Formosa Petrochemical Corp. (FPCC), scored approximately NT$100 billion (US$3.03 billion at US$1;NT$32.9) in pretax earnings in the first half of this year.
According to its internally audited financial statement, FPC registered NT$19.504 billion (US$592.82 million) in pretax earnings, or NT$2.92 (US$0.08) in earnings per share, in the first half of this year, representing a 59% year-on-year growth. The company posted NT$84.025 billion (US$2.55 billion) in sales in the first half of this year, up 18% year-on-year.
FPCC generated NT$37.65 billion (US$1.14 billion) of turnover in the first half of this year, representing an annual growth of 64.17%. The company said it posted NT$3.08 (US$0.09) in pretax earnings per share in the first half of this year, far more than NT$1.88 (US$0.05) posted the year earlier.
Although Nan Ya Plastics and FCFC haven't yet released financial statement, an institutional investor predicted the two companies would be able to see combined pretax earnings reach NT$45 billion (US$1.36 billion) in the fist half of this year. Based on the projection, the FPG's four major subsidiaries will see combined pretax earnings exceed the NT$100 billion (US$3.03 billion) mark in the first half of this year, hitting a historic high.
It is expected the group will see pretax earnings reach NT$110 billion (US$3.34 billion) in the first half of this year if the earnings scored by other subsidiaries, including Nan Ya PCB Corp., Inotera Memories Inc., Nan Ya Technology Corp. and Formosa Taffeta Co., are included.
FPC attributed its substantial growth in pretax earnings in the first half of this year to the considerable revenues from invested firms.
Nan Ya Plastics and FCFC registered NT$12.476 billion (US$379.2 million) and NT$8.637 billion (US$262.52 million) in the first quarter of this year, respectively. Both firms claimed that they could score even bigger earnings in the second quarter. An institutional investor predicted that Nan Ya Plastics would be able to see first-half earnings reach between NT$23 billion (US$699.08 million) and NT$25 billion (US$759.87 million), or NT$3 (US$0.09) in EPS. FCFC would be able to score earnings of between NT$19 billion (US$577.5 million) and NT$20 billion (US$607.9 million), or NT$3.5 (US$0.1) in EPS, in the first half.
An FPG executive attributed the group's substantial earning growth to the price surge in petrochemical products triggered by the increased demand of developing nations.
FPC said it posted NT$8.38 billion (US$254.71 million) in operating profits from core business in the first half of this year, up NT$3.53 billion year-on-year. The company also recognized NT$10.17 billion (US$309.11 million) in profits from investing in affiliated firms in the first half of this year, representing an annual increase of NT$3.07 billion (US$93.31 million).
To cope with the fourth-stage expansion of the group's naphtha-cracking complex, FPPC inaugurated its third naphtha-cracking plant, dubbed OL-3, at the end of May. Thanks to the inauguration of the OL-3, FPPC saw overall annual production capacity of ethylene increase to 2.9 million metric tons from the past 1.7 million metric tons. The company said the inauguration of the OL-3 plant will help the petrochemical plants owned by the FPG's subsidiaries make handsome profits in the second half of this year.
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| | ![]() | | | Taiwan's National Savings Rate Approaches 30%
Taipei, Aug. 28, 2007 (CENS)--Hit by rising uncertainty about future careers and lingering effect from credit-card crisis, Taiwan's national savings rate will surge to a record high of 29.86% next year after reaching an estimated 28.9% this year, according to a government study.
The study was recently released by the Directorate General of Budget, Accounting and Statistics (DGBAS) of the Executive Yuan, Taiwan's Cabinet.
The directorate general forecasted that Taiwan's overall savings will likely soar to record high of NT$1.2 trillion (US$36 billion at US$1:NT$33) next year as a result of lukewarm investments by the private sector.
Senior officials of the Cabinet-level Council for Economic Planning and Development (CEPD) said the excessive savings reflects excessive idle funds in banking system, posing a serious disadvantage to macro economy.
The figures in the study showed that estimated consumer spending inched up only 2.3% in the first half this year, slightly lower than previous forecasts. The organization's officials blamed lingering effect of the island's recent credit-card crisis and rising uncertainty among people about future careers for the low consumer spending and the high saving rates.
CEPD's officials pointed out that national savings in Japan, Hong Kong, Germany and mainland China is also soaring all due to fear for uncertain job future, a prevalent phenomenon of economic globalization.
They added that the trend will not change in near term and estimated the island's consumer spending would increase only 3.1% next year, pushing up the island's national savings rate to 29.86%, the highest since 1990.
Annual rate of Taiwan's average savings posted at 25% between 1998 and 2002 and has since climbed one percentage point each of the past four years, showing the steady decline in island's consumer spending.
DGBAS forecasts that investments could absorb around NT$2.7 trillion (US$81 billion) of the huge national savings of NT$3.7 trillion (US$112 billion) of this year, leaving around NT$1 trillion (US$30 billion) to next year's saving pool. With the remaining savings portion, the island's savings would reach NT$1.2 trillion (US$36 billion) next year.
CEPD's officials pointed out that short-term investments on the island reflects in part the influence of economic globalization. They contended that actually local enterprises had increased investments on the island in recent years although their overseas investments outnumbered domestic investments.
The council's officials noted that local investments have improved so far mostly thanks to some massive investment plans announced by the island's chipmakers in the second quarter. They estimated the island's excessive savings for next year would be slightly lower than their forecasts mostly due to investments by local chipmakers on expansions in conjunctions with business recovery.
In reaction to rising excessive savings, Central Bank Governor Peng Fai-nan expressed his worry and said at a recent speech in the Presidential Office that it would be top challenge for his bank.
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| | ![]() | | | Taiwan Opens Offshore Areas to Wind Power Operators
Taipei, Aug. 28, 2007 (CENS)--The Ministry of Economic Affairs (MOEA) recently worked out a set of guidelines for screening applications on installing wind turbines on offshore areas surrounding main Taiwan island and its offshore islets, and will begin receiving the applications on Sept. 1.
The production of the guidelines is part of Taiwan government's commitment to renewable-energy developments. In the initial stage, the government will allow applicants to install turbines capable of generating 300,000 kilowatts of electricity on the areas, which are called "offshore wind farms."
MOEA officials estimated the new market to bring the island's wind-power operators NT$40 billion (US$1.2 billion at US$1:NT$33) in business opportunities a year. It is understood that 10-some major Taiwanese enterprises including China Steel Corp., TECO Group, and Formosa Plastics Group (FPG) are gearing up to vie for the business opportunities.
Among them some have presented turbine blades for the systems. The FPG has entered production of gearbox while TECO has begun producing generators for the turbine , and has won approval from General Electric.
The ministry will open seven areas as the sites of the farm, including the offshore area between Miaoli and Taichung counties, the area off Chunghwa county's coastline, the Wai San Din Alluvium, area off Chayi and Tainan counties' coastline, area off Yilan county's coastline and offshore area surrounding Pescadores.
Most of existing offshore wind turbines in the world are laid 20 meters underneath sea waters along coast lines.
The ministry demands all licensed operators to complete installation of their wind farms in three years after acquiring permissions, and requires operators around main Taiwan island to run their facilities at full capacity at least 2,000 hours a year and operators on Pescadores to run at full capacities at 4,000 hours a year.
The ministry plans to set procurement price for the wind power at NT$2.7 per kilowatt an hour, compared with NT$2 for similar unit generated by private power factories on lands.
While opening offshore wind farms, the ministry plans o encourage installation of more wind turbines on land. So far, 121 such facilities with a combined load capacity of 699,999 megawatts of electricity have been completed throughout the island. The ministry estimated the capacity to increase to 1.22 million megawatts in 2010, allowing it to generate 3.3 billion kilowatts for 825,000 households a year.
The government-run Taiwan Power plans to set up offshore wind farms on Pescadores and area off Chunghwa's coastline to generate at least 100,000 kilowatts of electricity.
MOEA officials noted that installing wind turbines on offshore areas is much challenging than on land. They added that although many Taiwanese companies have muscled into power facility business, most of them are good at civil engineering projects. Japanese and German suppliers remain the major source of the island's generators.
To prevent foreign suppliers from bagging all of the island's contracts for offshore wind equipment, the ministry is planning to demand TaiPower use part of domestically made parts in its facilities.
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| | ![]() | | | Major TFT-LCD Panel Makers to Continue Investments in 2008
Taipei, Aug. 28, 2007 (CENS)--Major global thin film transistor-liquid crystal display (TFT-LCD) panel makers are expected to continue launching new investment projects in 2008, according to industry sources.
The sources said LG Philips LCD Co., Ltd. (LPL) of South Korea is scheduled to install eight-generation (8G) equipment at a new plant in the third quarter of 2008, while Samsung also plans to set up its second 8G panel line in the third quarter next year in addition to completing a capacity-expansion project with its 7G production line.
All major global panel makers reduced their investments this year to a low level of US$7.61 billion, down about 40% from previous year. The value is expected to recover clearly in 2008 as only the said two Korean panel suppliers are expected to invest about US$5.3 billion next year.
According to equipment suppliers, LPL is mapping out an 8G investment project for year 2008, in which the company would choose the same 8G substrate size as S-LCD Corp. (a joint venture between Samsung and Sony), i.e. 2,200mm x 2,500mm, and decide on an initial-stage monthly capacity of 50,000 substrates.
Samsung is also planning to pour 1.8 trillion South Korean Won to set up its second 8G line with planned monthly capacity of 50,000 substrates. The Korean panel maker also plans to continue to expand the capacity of its 7G line in 2008 with an additional monthly volume of 20,000 to 30,000 substrates.
Equipment suppliers estimated that Samsung and LPL are expected to invest a total of about 5 trillion Korean Won into equipment in 2008, breaking the 4 trillion Korean Won record set in 2005.
Taiwanese panel suppliers are evaluating their investments according to the market conditions in the fourth quarter of this year and the first quarter of 2008. Most are focusing on 6G or 7.5G capacity-expansion projects, rather than 8G plans.
AU Optronics Corp., the largest large-size TFT-LCD panel maker in Taiwan, plans to have capital spending of only NT$70 billion (US$2.12 billion at US$1: NT$33) in 2008 for expanding its 7.5G (7A plant, from 60,000 substrates to 78,000 or 80,000) and 6G (6G plant, from 90,000 to 120,000).
AUO's second 7.5G plant (7B) is scheduled to install equipment in the fourth quarter next year and start production in the third quarter of 2009.
Chi Mei Optoelectronics Corp. (CMO), the No. 2 panel supplier in Taiwan, has plans for capital spending of NT$56 billion to NT$63 billion (US$1.7 billion to US$1.91 billion) for constructing the firm's second 7.5G and 6G lines.
The No.3 Chunghwa Picture Tubes, Ltd. (CPT) and No. 4 HannStar Display Corp. have no new-plant construction project in 2008. CPT is expected to budget capital spending of NT$12.8 billion (US$387.87 million) next year for expanding its 6G capacity.
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| | ![]() | | | AIDC to Set UP Automotive Nerve Network System Alliance
Taipei, Aug. 28, 2007 (CENS)--With an eye on the lucrative automotive electronics market, Taiwan's largest aircraft maker Aerospace Industrial Development Corp. (AIDC) recently decided to set up the Advanced Automotive Nerve Network System Alliance with several local partners.
AIDC claimed that the cross-industry strategic alliance is scheduled to pour NT$500 million (US$15.15 million at US$1: NT$33) into development of various automotive-electronics products such as head-up display (HUD), GPS navigation system etc. integrated with the Controller Area Network Bus Campus Area Network (CAN BUS) broadcast, and differential serial bus standard.
The developed products are expected to be supplied to local and foreign automakers and create about NT$10 billion (US$303.03 million) worth of production value for the island, AIDC said.
A total of about 12 members are scheduled to join the automotive-electronic alliance, including High Tech Computer Corp. (HTC), Netergy Microelectronics, Inc., etc.
AIDC technical service department director Lin Nan-sheng pointed out that his company has initially selected several targeted products for the CAN BUS standard, including electric hatchback system, tire pressure monitoring system (TPMS), car PC, Adaptive Front Lighting System (AFS), etc. and would incorporate other items, such as the HUD, GPS navigation, anti-collision radar systems, into the targeted product list for an increasingly well-rounded product line.
According to Lin, all of the targeted products will be developed by AIDC's accumulated aerospace-grade techniques and technologies, making them not only applicable for the automotive CAN BUS standard but also adaptable into various specifications required by different carmakers' requirements.
AIDC is very confident in stepping into the automotive electronic business because the firm has accumulated considerable R&D and test capacities. The aircraft makers' first CAN BUS automotive network management software, the "i CAN", has been adopted by many famous local automotive-electronics makers for development of future products.
In addition, AIDC is also actively developing its second-generation fleet management system, the T-Span, which will be integrated with future's car PCs for tapping the logistic transportation market.
AIDC claimed that it also provide full-capacity and integrated test/analysis services to local and foreign automotive-electronic makers. The firm reiterated that it would utilize the CAN BUS standard as its core capacity to gradually develop itself into a major automotive-electronic subs-system supplier and a system-integration provider in the future globally.
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| | ![]() | | | Mega International Plans to Raise NT$50 B. Abroad in Q4
Taipei, Aug. 28, 2007 (CENS)--Mega International Commercial Bank, the merger between Chiao Tung Bank and International Commercial Bank of China, is planning to raise about NT$50 billion (US$1.52 billion at US$1 = NT$33) from the financial markets in the United States and Australia after its first anniversary.
Tsai Yu-tsai, chairman of the bank, indicated that Mega has erased a total of more than NT$10 billion (US$303.03 million) in non-performing loans over the past year and would get back on normal track as soon as possible. Tsai boasted that the bank is adept at overseas operations and has decided to expand overseas footholds to reinforce its strength abroad. In the fourth quarter of the year it is going to raise funds in overseas markets, mainly in the U.S. and Australia.
Riding the wave swept up by Chien-ming Wang, the Yankee pitcher and rising Taiwanese baseball star, Mega's branch in New York is going to issue Yankee CD (certificate of deposits) in the fourth quarter to raise a maximum of US$1 billion in the financial market there. Besides, its branch in Australia is planning to float commercial papers and mid-term financial bills worth of 600 million Australia dollars in the market there in November. The two projected issuances are expected to raise a total of NT$50 billion (US$1.52 billion) for the bank.
Over the past year Mega saw its deposits and loans climb up by 4.7% and 5.2%, respectively; and foreign exchange business shoot up by 32.7%. This year the bank's goal for forex underwriting is set at US$500 billion, although it estimated to suffer a loss of US$140 million from the impact caused by the U.S. sub-prime mortgage storm.
During the first year of the merger, Mega opened three overseas branches and is planning to set up more in the coming year. Tsai disclosed that the prospective branches would be established in Phnom Penh of Cambodia and Hanoi of Vietnam and would not rule out looking for a suitable place to set up one more foothold in Bahrain of the Middle East. In addition, the bank intends to establish a representative office in Bombay of India as well.
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| | ![]() | | | Taiwan's Underground Financing Grows Over 10 Times in 2006
Taipei, Aug. 28, 2007 (CENS)--Taiwan's underground financial segment was quite active last year despite facing a saturated banking problem. In 2006 Taiwan's law enforcers cracked down on illegal financing activities that totaled some NT$78 billion (US$2.36 billion at US$ 1 = NT$33), more than 10 times the corresponding NT$6.7 billion (US$203.03 million) recorded in 2005.
S. L. Chang, spokesperson of the Cabinet-level Financial Supervisory Commission (FSC), indicated that Taiwan's underground banking segment has clearly improved since the central bank here eased the foreign exchange control about two decades ago. During the martial law period, there were strict limitations on forex activities and people on the island had a tough time buying foreign currencies through limited legal channels, so most of them resorted to underground dealers, mainly jewelers who bought and sold forex.
Today such kind of services seem unnecessary since each person on the island is allowed to remit out maximum US$5 million per year and most banks offer forex services. Those that need underground financing services are believed very likely to be involved in criminal activities or foreign workers who want to send money back home quicker. Most foreign workers here come mainly from Vietnam, the Philippines and Indonesia, which lag behind in terms of financial industry.
However, an assessment recently done by the Asia/Pacific Group on Money Laundering (APG) in Taiwan showed that Taiwan passed 15 of the 24 items reviewed but failed nine. In overall assessment, Taiwan scored 62.5 points, merely clearing the threshold.
This year the Taiwanese financial units and institutions assessed by APG included four bureaus of FSC, four financial associations, and eight financial enterprises, namely, Chinatrust Commercial Bank, Cathay United Bank, the Remittances & Savings Department of Chunghwa Post Co., Citibank (Taiwan branch), China Bills Finance Corp., ING Life Insurance Co., Taiwan Branch, China Life Insurance Co., and Yuanta Core Pacific Securities.
FSC said that APG's assessment is quite stringent yet transparent and the final report will be sent to International Monetary Fund (IMF) and the World Bank.
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| | ![]() | | | Giant Recorded Net Profits of NT$883 M. for 1st Half of This Year
Taipei, August 28, 2007 (CENS)--Giant Bicycle Inc., the world's leading supplier of bicycles, scored net profits of nearly NT$883 million, or NT$3.15 per share for the first half of this year, sharply growing 52.87% from a year earlier and a historical high, according to company sources.
Recently, the board at Giant made a decision to increase investment worth US$10 million to expand production capacity at its manufacturing plant of light aluminum alloy located in China, in a bid to raise its market share for semi-solid and superplastic aluminum alloy. At the moment, Giant has capitalization of US$11 million for making light alloy, which brought in net profits of RMB17.57 million last year.
Marketing its own Giant brand, the group collectively posted combined revenue of NT$15.6 billion for the first half of this year, up 21% from a year earlier, and pretax profits of NT$1.136 billion.
Meanwhile, sales revenue its plant in Taiwan grew by 18% in the same period, while gross profit rates and earnings posted by its plant in China also markedly went up due mainly to steady prices of raw materials. In addition, Giant has tapped the Chinese market for electric bicycles, as well as enjoyed sharply growing sales revenue and profits in the market after having diversified its operations for light alloy.
Giant noted that to broaden its business operations in the northern Chinese market, the group has decided to invest US$12 million in building a plant in Tientsin City, a business metropolis in China, and scheduled to activate the plant starting the first quarter of 2008. The new plant will not only supply the local market, but export to overseas markets, helping Giant to further its operational deployment in China.
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| | ![]() | | | Prices of 7-inch Display Panels to Rise 30% in Sept
Taipei, August 28, 2007 (CENS)--With plentiful shipments of digital photo frames and ultra mobile PCs (UMPCs) scheduled for the second half of this year causing tight supply of 7-inch display panels, selling prices of such display panels are expected to rise up to US$27 per unit on average in September, according to industry sources.
According to the sources, shipment of portable DVD players will total 18 million units for this year worldwide, while sales of hot-selling digital photo frames are very likely to reach 10 million units, and PC applications, such as OLPCs, Eee PCs and UMPCs, to reach more than 2 million units.
Driven by momentum from aforementioned electronic products, as well as automotive displays and mobile TVs, the market for such consumer applications has been rapidly growing to tighten supply of 7-inch display panels in the line this year.
The selling prices of 7-inch display panels once dropped to less than US$20 per unit in the first quarter of this year, but, with simmering market demand, has edged up starting this May to reach between US$25-26 in August, growing by over 30%.
Makers in the sector noted that although switching their production focus to such medium-sized display panels with their four-gereration production lines, including some of the five-generation, they are still facing a deficiency in production capacity in the third quarter of the year, due mainly to those production lines being partly booked for large-sized models.
Besides, with booming sales of consumer electronics in the third quarter, market demand for 7-inch display panels for the second half of the year will further increase 10-15% from 15 million units posted over the first half.
Suppliers projected that such tight supply of 7-inch display panels will carry over till the fourth quarter of the year, and prices of the panels will keep rising to US$27 per unit on average in September, with high-end models to break US$30 per unit. Coincidentally, makers of this kind, including Innolux Display Corp., Chunghwa Picture Tube Ltd. and AU Optronics Corp. (AUO), have achieved shipment of more than one million units per month this year, slightly boosting their profits.
Originally, 7-inch display panels are mainly produced with 3- and 3.5-generation production lines. However, the aforementioned three makers have had their four- and 4.5-generation lines set for production of such medium-sized display panels in the third quarter to boost shipment of the panels.
Worth mentioning is that Korea's LPL and Taiwan's HannStar Display Corp. have set aside part of their capacity in their five-generation production lines to turn out 7-inch display panels. In fact, a 4.5-generation glass substrate can be cut into 36 7-inch display panels, while a five-generation substrate up to 80 panels. This may improve the supply of medium-sized display panels next year.
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