| Prime News | | ![]() | ![]() | FSC Sets High Criteria for New Financial Holding Firms
Taipei, Sept. 5, 2007 (CENS)--To apply for the establishment of new financial holding firms, domestic financial institutions will have to meet the minimum requirement of NT$60 billion of paid-in capital and NT$750 billion of assets, announced the Cabinet-level Financial Supervisory Commission (FSC) yesterday (Sept. 4).
The criteria are much higher than NT$20 billion of paid-in capital and NT$300 billion of assets required by the FSC when approving establishment of the existing 14 financial holding firms from 2001, as well as much higher than original market expectation, apparently in response to instruction of President Chen Shui-bian calling for restarting of the stalled second financial reform, which, aims, among others, to halve the number of financial holding firms.
Consequently, of the prospective applicants for setup of new financial holding firms, only Taiwan Financial Holding, comprising state-owned Bank of Taiwan, Land Bank of Taiwan, and the Export-Import Bank of ROC, will qualify, while others, such as Taiwan Industrial Bank, will have to abandon their plan.
Although the new criteria will not be retroactive, existing financial holding firms failing to meet the criteria will have to formulate business development plans, aiming to augment their scale or management synergy via own development or cooperation with others, according to FSC, which, though, doesn't set a timetable for the improvement plans.
FSC statistics show seven existing financial holding firms fail to meet the new criteria, including Waterland, Jih Sun, E.Sun, Shin Kong, Yuanta, China Development, and Hua Nan, of which Waterland, Jih Sun, and E.Sun fail on both counts.
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| | ![]() | | | Terry Gou Donates NT$15 B. to NTU for Cancer Treatment
Taipei, Sept. 5, 2007 (CENS)--Terry Gou, chairman of Taiwan's leading manufacturer Hon Hai Group, announced yesterday (Sept. 4) donation of NT$15 billion to National Taiwan University for the establishment of a 500-bed cancer center and advanced cancer-curing proton center, in addition to joint development of biotech medicine.
Upon signing the memorandum of cooperation with Gou, Lee Si-chen, president of National Taiwan University, noted that the endowment is the largest single donation for a medical college worldwide and the fifth largest for a university, calling it a "historic" move.
Of the amount, NT$10 billion will spent on setting up a cancer center and a proton center in the compound of National Taiwan University Hospital in Kungguan, Taipei, while the remaining NT$5 billion will be dedicated to joint medical research programs, including advanced medical equipment, stem-cell transplanting, preventive medicine, and medical engineering, with Gou entitled to 50% of patent rights for research results with commercial value.
Gou made the donation in the capacity as chairman of the charitable Yungling Foundation, emphasizing that it is a "non profit-making public-welfare cooperation program," adding that the money is donated to a cooperative partner most capable of creating value.
He pointed out that over the past five years, he has been fighting cancer as two of his loved ones (wife and brother) have died of the disease, hoping that National Taiwan University will be able to complete setup of the cancer center and the proton center within two years.
In emulation of the practice of Bill Malinda Gates Foundation, Yungling Foundation will play a supervisory and auditing role for the use of the donation, so that "every dollar can achieve the function of two dollars," according to Gou.
Gou emphasized that Yungling Foundation will take part in the research programs of stem-cell transplantation and preventive medicine actively and all earnings from the programs will be used in subsidizing R&D and personnel cultivation, charitable donation, and public-welfare activities.
The programs appear to be part of Gou's plan spending NT$100 billion in stepping into the biotech and medical industry.
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| | ![]() | | | Cement Firms See Lower Earnings From Core Business in Taiwan
Taipei, Sept. 5, 2007 (CENS)--Taiwan's cement firms are suffering shrinkage in earnings from core business in domestic market while posting growth in mainland China.
All the listed cement firms on the Taiwan Stock Exchange and over-the-counter stock market encountered declines in earnings in the first half of this year, with Lucky Cement Corp. posting the largest decline in earnings at 60% year-on-year in the first half.
Impacted by the demand slump in domestic market, Taiwan Cement Corp. and Asia Cement Corp., Taiwan's two-largest cement producers, posted NT$1.29 billion (US$39.09 million at US$1:NT$33) and NT$1.05 billion (US$31.81 million) in operating income in the first half of this year, down 12.2% and 11.8% year-on-year, respectively.
Taiwan Cement noted it exported 2.8 million metric tons of cement in the first half of this year, compared to only 2.4 million metric tons for domestic sales. This was the first time for the company to see exports exceed domestic sales.
Nevertheless, Taiwan Cement's president Huang Chien-chiang believed his company would see domestic sales recover to past level in the fourth quarter of this year when was traditionally a peak sales season for domestic cement market.
Universal Cement Corporation noted it posted the same operating losses in the first half of this year as the year earlier. Universal president Lee Kuo-tung said the construction industry in southern Taiwan in the first half of this year did not recover as expected. To cut operating losses, the company has recently resolved to temporarily halt production of its pre-mixed concrete in Linfengying of Tainan County, southern Taiwan. Lee said his company lost an average of NT$1 million (US$30,300) monthly since the beginning of this year in the Linfengying plant.
With an annual production capacity reaching 150,000 cubic meters of pre-mixed concrete, the Linfengyin plant saw actual output amount to only 93,000 cubic meters last year. The company sold 28,000 cubic meters of pre-mixed concrete in the first half of this year, compared to the projection of 88,000 cubic meters.
Others in this field, including Chia Hsin Cement Corp., Lucky Cement Corp., Southeast Cement Corp. and Hsing Ta Cement Co., also saw declines in operating income in the first half of this year. Of them, Lucky registered NT$74.74 million (US$2.26 million) in operating income in the first half of this year, down 64% year-on-year.
Asia Cement said it has been enjoying growth in operating earnings in the mainland thanks to its heavy investments over the past several years. T.H. Chang, president of Ya Dong Cement, Asia Cement's subsidiary in the mainland, said demand for cement in the mainland would continue growing to 2015 at least. He stressed his company won't meet tough competition in the mainland in the foreseeable future.
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| | ![]() | | | TSEC to Boost Global Competitiveness by Integrating Peripheral Units
Taipei, Sept. 5, 2007 (CENS)--Seeing the continued slump in its ranking among global bourses in terms of market capitalization and trade volume, the Taiwan Stock Exchange Corporation (TSEC) is making all-out efforts to integrate peripheral units, restructure internal organization, create favorable listing environment, and enhance global collaboration.
According to statistics compiled by the TSEC, Taiwan Stock Exchange (TSE), Taiwan's main stock exchange, saw international ranking slip to 20th in June 2007 from 15th in 2004 in terms of trading volume. In respect of market capitalization, the TSE saw its global ranking slump to 17th in June 2007 from 10th in 2004.
Faced with the slide in international ranking, TSEC chairman Wu Rong-I noted TSEC has made progress while peers have made greater achievements over the past few years. But TSEC has felt a sense of exigency and managed to raise its international competitiveness to cope with the drastic change in the international capital market.
In terms of integrating peripheral units, TSEC said a holding company will be created by way of share swap among such stock-related units as TSEC, Gre Tai Securities Market, Taiwan Futures Exchange Corp. and Taiwan Depository Clearing Corporation.
The TSEC noted to cope with the globalization wave, the change of the global securities industry has given birth to a brand-new operating model for the global capital market.
After learning the efforts made by counterpart stock markets globally, TSEC said it's a must for consolidating the resources and strength of peripheral units to compete with peers globally.
But the consolidation of the peripheral units is stalled by the 128th article of the Securities Law, which the authority has promised to revise.
Incidentally, the TSEC has been enhancing its nature by adjusting internal structure. For instance, the company is transforming itself into a service-oriented firm by dividing present listing department into listing services and listing government units.
The TSEC said it would be able to reach the target of listing 90 firms in three years as requested by the FSC. The company firmly believed the TSE will see the number of newly listed firms reach 25 in 2007 alone.
In terms of stepping up international cooperation, the TSEC said it has successfully increased globalization on the TSE. For instance, foreign participation in the TSE has risen to 33.7% from 16.3% in terms of market capitalization, and increased to 18.8% from 4.5% in respect of trading volume since 2000.
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| | ![]() | | | Taiwanese LED Makers Report A Banner August
Taipei, Sept. 5, 2007 (CENS)--Mostly thanks to arrival of peak seasons, many Taiwanese suppliers of light-emitting diode (LED) products are estimated to see their revenues for August hit new highs.
Everlight Electronics is estimated to have revenue of over NT$900 million (US$27 million at US$1:NT$33) for August based on its July revenue of NT$869 million (US$26 million). Once the company's August revenue meets the expectations, its revenue result will set another new high for the fourth consecutive month and its August result will represent a 30% increase from the same period of last year.
Everlight's chairman, Y.F. Yieh, expressed confidence in the company's sales for this quarter, stating his company has readied sufficient capacity for this quarter. He said the company's production will run at full capacity soon this quarter, pushing up its quarterly gross margin to over 30%. Yieh forecast his company's revenue for September to grow further.
Industry watchers expected Everlight to dethrone Lite-On Technology Corp. as the island's No.1 LED packager with its August revenue. Although Lite-On has not yet released its August revenue result, industry watchers believe Everlight will very likely surpass Lite-On from Lite-On's July LED revenue of NT$880 million (US$26.6 million).
Yieh was a former Lite-On executive. His company has been Lite-On's archrival at home since his company's inception. His company is first Taiwanese LED maker to acquire Osram's white-LED technology licensing.
Everlight has caught eye of liquid-crystal display (LCD) makers at home and overseas. LCD makers are gearing up to replace cold cathode fluorescent lamp (CCFL) with LED as backlighting modules in their displays. In addition, at least four lighting manufacturers are working with Everlight on LED lamps.
Industry watchers estimated at least 11 notebook-computer brands will use LED as backlighting module this year and Everlight has won quality validations from many of them. Some institutional investors estimate LED will go into 15% of notebook computers worldwide in 2008 and 41% in 2010, up from 5% of this year.
Institutional investor Macquarie recently raised its target price on Everlight stock to NT$177 (US$5.36) per share in reflection of its upbeat forecast of the company's business outlook.
Yieh has also led his company to muscle into solar-energy industry by putting money into solar-cell maker Gintech Energy Corp. He stressed LED and solar energy can complement each other perfectly.
His company had pre-tax earnings of NT$968 million (US$29 million) and after-tax earnings of NT$824 million (US$24.9 million), or NT$2.5 per share, on revenue of NT$4.2 billion (US$128 million) in the first half this year. In the second quarter alone, the company had pre-tax earnings of NT$465 million (US$14 million) and after-tax earnings of NT$400 million (US$12 million) on revenue of NT$2.2 billion (US$68 million).
I-Chiun Precision Industry Co., Ltd., which is good at LED lead frames, raked in revenue of NT$431 million (US$13 million) in August, increasing 27.6% year-on-year and hitting a new high. Throughout the first eight months this year, the company had total revenue of NT$2.8 billion (US$85 million), up 20.95% from the same period of last year.
I-Chiun boosted output capacity of surface-mounted diode (SMD) lead frames to 250 million units a month in July. Nevertheless, the added capacity has been completely filled out by robust orders. The company's executives pointed out that order had outnumbered his company's capacity by 20-30% into this month and expected excessive demands to continue into next quarter.
Bright LED Electronics Corp., another leading Taiwanese LED packager, is estimated to have revenue of at least NT$326 million (US$9.8 million) last month and have NT$4 billion (US$121 million) throughout this year. The company raked in revenue of NT$300 million (US$9 million) in July this year.
Mostly thanks to strong demand and rollout of new products, the company's gross margin increased to 26.5% in the second quarter from 22.5% a quarter earlier. In the second quarter, the company had revenue of NT$828 million (US$25 million) , surging 28.5% from a year earlier. In the meantime, the firm's after-earnings increased 62.5% to record high of NT$139 million (US$4.2 million). Throughout the first half this year, the company had pretax earnings of NT$268 million (US$8 million) and after-tax profits of NT$225 million (US$6.8 million), or NT$1.44 per share.
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| | ![]() | | | ASE to 100% Own ASE Test
Taipei, Sept. 5, 2007 (CENS)--Chip assembler Advanced Semiconductor Engineering (ASE) Inc. yesterday announced it will acquire the remaining 49% ownership of ASE Test Ltd. for US$784 million. The acquisition will allow it to wholly own the chip testing affiliate with the 51% stake it already holds.
According to the company's executives, behind the 100% acquisition of the affiliate is the company's plan to streamline its organization structure to pare down financial burden and promote unified brand name.
Currently, ASE Test pays US$1-2 million a year for its listing on Nasdaq. After the acquisition, ASE Test will be delisted, saving the annual spending. ASE plans to complete the acquisition by the end of this year.
ASE plans to buy ASE Test's America Depository Receipts (ADRs) currently trading on Nasdaq at a premium US$14.78 per unit and its Taiwan Depository Receipts (TDRs) floating on Taiwan's stock market at a premium US$0.185 per unit. The acquisition will be paid in cash.
ASE Test will become another Taiwanese company to delist from Nasdaq after chipmaker Macronix International Co., Ltd.
Taiwanese industry watchers pointed out that the acquisition will help boost ASE's share price since the chip tester has never posted loss since its establishment in 1995 in Singapore. ASE's executives their company's profitability will considerably increase by including ASE Tester's earnings into its.
ASE Test specializes in test service for high-performance wireless and logic chips, operating 777 testing machines and 402 binding machines. Among its major customers are Altera, Qualcomm, CSR, Infineon and VIA Technologies.
The company's revenue averages US$500 million a year. Throughout the first half of this year, the company had revenue of US$212 million, gross margin of 28.2%, operating income of US$23.16 million, pretax earnings of US$31.44 million and after-tax net income of US$15.37 million.
Industry watchers pointed out that ASE has worked hard to pare down production costs and set up total-solution capability by expanding into upstream and downstream sectors.
ASE is estimated to have revenue crossing NT$9 billion (US$272 million at US$1:NT$33) in August alone after reporting NT$8.5 billion (US$257 million) in July this year. The company projects revenue for the third quarter to grow 10-15% throughout this quarter mostly thanks to strong demands incurred by back-to-school shopping spree.
The company's packaging capacity has been completely sold out and its testing capacity is dealing with increased orders. Industry watchers expected the company's sales growth to continue into the fourth quarter.
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| | ![]() | | | Optical Disc Makers Diversify Into LCD Light-guide Panels
Taipei, Sept. 5, 2007 (CENS)--A group of local optical-disc manufacturers are actively diversifying their businesses into new fields such as energy industry and light-guide panels used in liquid crystal displays (LCDs) with existing plastic-injection equipment
These transformation projects have been emerging this year, with some companies having developed mass-production techniques for new targeted products.
Local optical-disc makers undergoing diversification projects include CMC Magnetics Corp. (which set up a new subsidiary, Sun Well Technology, in this year to produce thin-film solar cells), Gigastorage Corp. (engaging in production of conductive adhesive for solar-cell production), Prodisc Technology Inc. (developing LED diffusion sheets), Lead Data Inc. (producing digital photo frame).
Industry sources pointed out that both Prodisc and Gigastorage are working on LCD light-guide panel products and they already entered the preparatory mass-production stage of some small-size products. The sources explained that the plastic-injection machines for making optical discs could be modified to turn out light-guide panels with injection thickness adjustments (to 0.4mm or 0.5mm plastic sheets).
Currently, the sources said, each DVD disc production line has two injection machines with each turns out plastic discs with thickness of 0.6mm, two of which will be sealed into one DVD disc.
Some optical-disc makers pointed out that the unfavorable business climate in optical-disc market has led to plunging product prices and transformations of disc makers. With the same production equipment and the market currently lacks a really-leading supplier (means more chances), they added, the light-guide business attracted many optical-disc makers.
There are already a group of light-guide panel manufacturers in Taiwan, including Coretronic Corp., Yeti Electronics Co., Ltd., Taiwan Nano Electro-Optical Technology Co., Ltd., K-Bridge Technology Co., Ltd. etc. With optical-disc makers venturing into the light-guide business, one expects to see some impact on the existing market environment, the sources said.
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| | ![]() | | | Bio-fuel Shift Might Raise New-car Purchase: Automakers
Taipei, Sept. 5, 2007 (CENS)--The policy set by Taiwan government to push bio-diesel and alcohol-gasoline fuels is expected to trigger another wave of car-replacement purchase in next 10 years, generating demand for about one million new cars that might equal to NT$500 billion (US$15.15 billion at US$1: NT$33) worth of business opportunities, according to automakers.
Research results released by Taiwan Transportation Vehicle Manufacturers' Association (TTVMA) showed that the greatest majority of cars locally made after 2001 can directly shift to using the E3 alcohol gasoline (featuring 3% alcohol content), but not models locally produced before 2000.
Currently, TTVMA said, about three million cars run on the island's roads were produced by 2001 and are expected to be replaced in next 10 years.
The government has decided to promote use of biotech energy starting from September this year, targeting to boost consumption of biotech energy to 100,000 kiloliters, or 1% of domestic gasoline consumption, by 2011, a plan which will induce investment of NT$1.3 billion (US$39.39 million) and annual output value of NT$3 billion (US$90.9 million), according to a recent news report.
Wang Yun-min, deputy director general of the Bureau of Energy, the Ministry of Economic Affairs, reported that the biotech alcohol project would be carried out in three stages, with the first stage lasting from September this year to December 2008, when the Chinese Petroleum Corp. will set up eight E3 alcohol gasoline stations in Taipei for filling tanks of E3 alcohol gasoline-friendly public vehicles in the city, aiming to reach annual consumption of 770 kiloliters of E3 alcohol.
Local automakers said that the shift from high-quality gasoline to unleaded gasoline was not very difficult (with only easy adjustments to the catalytic converter and some small parts) but that from unleaded gasoline to alcohol gasoline requires more sophisticated work such as exchange of all fuel lines and even resetting the engine control chips. The costs of shift to alcohol gasoline might too high to be accepted by the most older car owners, automakers said, so there is expected to be a new wave of old-model replacement wave in next few years.
The government, however, did not give a buffering period of bio-diesel fuel and is scheduled to begin to provide bio-diesel on August 1 2008 and simultaneously stop providing super diesel at all gas stations around the island. IN 2010, the government plans to provide all B2 dio-diesel throughout the island while stop supply of the B1 predecessor.
Data released by local automakers showed that most heavy-duty truck and bus models sold after 2001 in Taiwan can compatible with the B1 bio-diesel fuel, but the real test results might be different because the automakers' data are tested under Japan's bio-diesel standards.
They also said that the shift to bio-diesel is expected to trigger a replacement purchase wave in heavy-duty commercial-vehicle market because most such vehicles have longer service lives that general passenger cars in Taiwan.
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| | ![]() | | | Over 100,000 Laid Off in Taiwan Over 3.5 Years
Taipei, Sept. 5, 2007 (CENS)--Taiwan witnessed a total of 107,344 workers laid off from January 2004 to August 2007 in 715 large-sized dismissal cases, according to the statistics recently released by the Cabinet-level Council of Labor Affairs (CLA).
Insiders disclosed that the number of laid-off workers did not include the unreported ones. It's estimated that there were about 45 unreported laid-off cases in the last three and half years. So, the number of the dismissed workers should be much larger than the one officially announced.
Most of the dismissals involve negotiations and those causing disputes between employers and employees, mainly disagreements over amount of severance pay, are usually referred to third parties instead of CLA or other government units. Some employers suddenly disappear after unexpected shutdown of their businesses and flee to avoid having to settle with employees.
If a company does not follow the labor law to lay off its employees, contentions often happen unless the company offers better terms than legally required to the laid-off workers. According to the labor protection law, each illegal lay-off can be fined NT$100,000 (US$3,030.3 at US$1 = NT$33) to NT$500,000 (US$15,151.5) and such fines can be repeated for the same case.
CLA disclosed that manufacturing industry accounted for the lion's share of the above-mentioned 715 dismissals since many manufacturers have in recent years closed their plants on the island to move offshore. The exoduses by Taiwanese manufacturers have resulted in massive reduction in employees. CLA demanded that employers intending to downsize should follow the labor law or face punishment.
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| | ![]() | | | Taiwan's Car Loans Drops for 19th Month to NT$102 B. in July
Taipei, Sept. 5, 2007 (CENS)--Influenced by the international oil price hike and the shrinking consumer spending caused by twin-card debt storm, Taiwan's outstanding car loans witnessed 19th consecutive monthly drop to NT$102.108 billion (US$3.09 billion at US$1 = NT$33) at the end of July of this year.
Market observers indicated that the declining car loans are due mainly to the near saturation of the auto market on the island, not to mention the ballooning oil prices. They believed that the outstanding car loans would further decline to below NT$100 billion (US$3.03 billion) in August, the traditional Chinese "ghost" month, which is also stereotyped as a sluggish business month.
In contrast, housing loans in July grew rapidly due to the recovery of real estate market. At the end of the month, the outstanding construction loans increased by NT$16.6 billion (US$503.03 million) from a month earlier to NT$957.749 billion (US$29.02 billion) for a sharp annual rise of 30%. In the same period, the outstanding home-purchasing loans jumped by NT$27.3 billion (US$827.27 million) to NT$4.5792 trillion (US$138.76 billion). As for house-repairing loans, the outstanding value edged up by NT$74 million (US$2.24 million) to NT$842.9 billion (US$25.54 billion).
The central bank here raised the prime interest rate by 0.25 of a percentage point at the end of June. As a result, most banks on the island followed suit to adjust upwardly their interest rates for housing loans, which meant that housing loan borrowers have to pay more to their creditor banks. This is very likely to discourage a bit the home-purchasing willingness of consumers. So, insiders predicted that the growth of the outstanding home-purchasing loans might slow down in the second half of the year.
Getting out of the default card debt shadow, the consumer loan market is gaining strength. At the end of July the outstanding personal consumer loans stood at NT$866.811 billion (US$26.27 billion), climbing by NT$10.9 billion (US$330.3 million) from the previous month.
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| | ![]() | | | Value of Communication Devices Made in Taiwan Dips 5.4% in H1
Taipei, Sept. 5, 2007 (CENS)--Production value of Taiwan's communication devices making sector amounted to about NT$317.5 billion for the first half of this year, dropping 5.4% from a year earlier, according to statistics complied by Industry & Technology Intelligence Services (ITIS) under the government-funded Industrial Economics & Knowledge Center (IEK).
Although still maintaining a double-digit growth in shipment of broadband devices, the sector, after experiencing explosive growth in production value in 2006, faces a decline for the first time this year due mainly to makers of wireless communication devices suffering a sharp downturn in shipment of mobile phones.
Since BenQ Corporation announced a withdrawal of investment in its reinvested mobile phone company in Germany, BenQ Mobile GmbH & Co. OHG, at the end of last year, its quarterly shipment has plummeted.
Coincidentally, with Motorola decreasing its orders for mobile phones, its contract supplier, Compal Communications Inc., has also seen shipment decline to only 25 million mobile phones over the first half of this year.
According to report by ITIS, shipment of mobile phone makers in Taiwan starts ebbing for the first time in the first half of the year, with production value sharply dropping by 40%, impacting the whole industry on the island.
In fact, there are two major product lines in the sector making wireless communication devices, namely mobile phones and global positioning system (GPS) devices, with sales of the former having gone downward and the latter upward this year.
Shipment of mobile phones posted by the sector in Taiwan amounted to only 43.16 million units over the first half of the year, down 36.7% from 67.55 million units a year earlier, with production value slipping by 40% to NT$95.2 billion for the same period from NT$159.5 billion scored last year.
On another front, thanks to increasing orders for portable navigation devices (PNDs) from Garmin, TomTom and MiTAC Internation Corp., Taiwanese makers of GPS devices reported production value worth NT$71.8 billion for the first half of the year, up 69.7% from a year earlier, with a portion of models for autos having surged to 79% of total PNDs.
In total, the sector making wireless communication devices has generated production value of about NT$213.3 billion for the period, dropping 13.7% from a year earlier. This is the first time for the sector in Taiwan to see such a decline.
On the other hand, makers of broadband devices have maintained a strong growth in shipment of xDSL client premises equipment (CPE) and cable CPE, thanks to broadband services getting prevailing to give an impetus to the sector, which scored production value of about NT$104.2 billion for the first half of this year, up 17.8% from a year earlier.
Looking at the second half of this year, hot-selling GPS devices are expected to remain as mainstream products fueling Taiwan's industry making wireless communication devices to attain production value of NT$283.9 billion during the period, slightly up 7.9% from a year earlier, while shipment of mobile phones may keep declining.
Also, with broadband service carrier all around the world actively promoting use of cable CPE and IP phones, Taiwanese makers of broadband devices may see shipment of the two products grow by 77% and 118%, respectively, in the second half of this year, and generate production value worth NT$121.5 billion for the same period, up 20.8% from a year earlier.
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| | ![]() | | | Taiwan Suppliers of Passive Components Benefit from Venturing into LEDs
Taipei, Sept. 5, 2007 (CENS)--Taiwanese suppliers of passive components have been venturing into the field of light-emitting diodes (LEDs), with Holy Stone Enterprise Co., Ltd. already scoring profits from its LED thermal-dissipation substrates, and TA-I Technology Co., Ltd. to see a promising future for its reinvested company making LED chips.
To broaden its product lines, Holy Stone has newly developed LED thermal-dissipation substrates, and already starts delivery of the products with small batches to some new clients, in addition to its existing ones of outdoor lamps and auto lamps.
With shipment of such new products increasing, the product line has contributed to turnover of several million NT dollars per month for Holy Stone who turned profitable last month, and will most likely grow month by month in the future, according to the company.
On the other hand, this year TA-I diversified its business operations by acquiring 15% controlling stake in Lumitech Opto Technologies Co., Ltd., which is a Taiwan-based supplier specializing in cutting LED chips and providing related equipment as well as fluorescent materials, and very likely to challenge turnover of around NT$2 billion for entire the year.
Incidentally, some Taiwanese suppliers in the supply chain of passive components, including Leatec Fine Ceramics Co., Ltd., Polytronics Technology Corporation (PTTC) and ACME Electronics Corporation, have been actively exploring the market for LEDs, and are expected to generate profits as soon as the fourth quarter of this year.
Leatec has recently been targeting the market for ceramic materials used for LEDs and automotive electronics, with such products contributing 30% to its total sales for the time being, and projects shipment of its ceramic substrates for LEDs to grow gradually over the second half of this year. Besides, Leatec hopes to drive up sales to LEDs and automotive electronics up to a 50% proportion of its total sales in next one year.
PTTC has joined forces with Japan's DENKA to develop aluminum thermal-dissipation substrate and flexible substrates for LEDs, in replace of alumina substrates. The new substrates can help backlight modules to perform more efficiently, and the company is scheduled to start delivery in the fourth quarter of this year.
ACME is also to pour a total of NT$1.38 billion in next one and half years into developing GaN-based LEDs, and already procured a set of specialized equipment to carry out R&D and production on a trial basis.
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| | ![]() | | | Taiwan's FPD Production Value Hit NT$725.4 B. in 1st Half
By QUINCY LIANG
The production value of Taiwan's flat panel display (FPD) industry reached NT$725.38 billion (US$21.98 billion at NT$33:US$1) in the first half of 2007, according to statistics released by the Industrial Economics & Knowledge Center (IEK) of ITIS (Industrial Technology Information Service & Promotion Project), a government-sponsored initiative for collecting and analyzing industry data.
Of the total amount, assembled FPDs made up NT$521.71 billion (US$15.81 billion), in which large-sized (over-10-inch) thin film transistor-liquid crystal display (TFT-LCD) panels accounted for NT$438.4 billion (US$13.28 billion), small- and medium-sized TFT-LCDs NT$47.65 billion (US$1.44 billion), and TN/super twisted nematic (STN) LCDs NT$32.9 billion (US$0.99 billion). Parts and components contributed NT$203.67 billion (US$6.17 billion), including NT$52.13 billion (US$1.58 billion) generated by color filters, NT$30.88 billion (US$935.76 million) by polarizers, NT$51.54 billion (US$1.56 billion) by glass substrates, and NT$69.13 billion (US$2.09 billion) by backlight modules.
Growth in Q2
FPD production for the second quarter of the year totaled NT$399.88 billion (US$12.12 billion), up 22.9% from the previous quarter. Assembled FPDs made up NT$290.58 billion (US$8.81 billion) of the overall amount, up 25.7%, while parts and components accounted for NT$109.3 billion (US$3.31 billion), up 15.8%.
Of the total value of assembled FPDs, large-sized TFT-LCDs, small- and medium-sized TFT-LCDs, and TN/STN LCDs contributed NT$245.18 billion (US$7.43 billion), NT$27.84 billion (US$843.64 million), and NT$16.2 billion (US$490.91 million), respectively, in second-quarter production value. The value of parts production includes color filters at NT$29.06 billion (US$880.61 million), polarizers at NT$16.56 billion (US$501.82 million), glass substrates at NT$26.76 billion (US$810.91 million), and backlight modules at NT$36.93 billion (US$1.12 billion).
Thanks to the efforts made by manufacturers to control capacity and clean up inventory, the oversupply of large-sized TFT-LCD panels that had plagued the industry for several quarters disappeared. The inventory cleanup was helped by increasing demand from makers of terminal product, who were stocking up in anticipation of future price hikes for panels.
A rising-price trend became apparent in the second quarter, as prices of monitors and notebook PC panels began climbing by 1% to 2% per month while prices of 20-, 26-, and 32-inch TV panels halted a year-long slide and started climbing again. Prices of 37- and 42-inch panels also stopped declining and stabilized. These conditions helped bring about a 26.9% growth in sales of large-sized TFT-LCD panels, according to ITIS-IEK.
Small- and medium-sized TFT-LCD panels also enjoyed a rare price hike in the second quarter thanks to a supply shortage brought on by a reduced capacity for small- and medium-sized panel production as manufacturers shifted to large-sized products, as well as by strong demand resulting from the introduction of new application products. The production value of these panels also increased compared with the first quarter, by a robust 41%.
The production value of organic light-emitting-diodes (OLEDs) for the cellphone sub-panel market has been declining—the drop reached 4.8% in the second quarter--because active-matrix (AM) OLED application technology has not adequately matured plus the fact that passive-matrix (PM) OLEDs cost more than their TN/STN counterparts. Some local AM OLED companies, however, have sent product samples to international cellphone makers for evaluation.
The increasing popularity of TFT-LCD panels in cellphone displays has put a squeeze on TN/STN products, which suffered a decline of 3.0% in production value in the second quarter. IEK-ITIS noted that some TN/STN panel makers have expanded into the production of TFT-LCD modules (LCMs), and most of those producers enjoyed growing revenue during the April-June period. Other manufacturers turned to other non-cellphone application markets, and most of them suffered minor revenue declines.
Q3 Forecast
IEK-ITIS predicted that the panel supply shortage would ease gradually in the third quarter, in which Taiwan's total FPD production value is expected to reach NT$438.99 billion (US$13.3 billion), up 9.8% from Q2. Assembled FPDs alone are expected to account for NT$318.34 billion (US$9.65 billion) of the overall amount.
Large-sized TFT-LCD panels, small- and medium-sized TFT-LCD panels, TN/STN LCDs, and OLED panels are expected to contribute NT$269.7 billion (US$8.17 billion), NT$30.9 billion (US$936.36 million), NT$16.3 billion (US$493.94 million), and NT$1.25 billion (US$37.88 million), respectively, to the total.
FPD parts and components are expected to achieve a total production value of NT$124.02 billion (US$3.76 billion), in the third quarter, up 13.5%, with the total including NT$32.54 billion (US$986.06 million) generated by color filters, NT$17.88 billion (US$541.82 million) by polarizers, NT$29.43 billion (US$891.82 million) by glass substrates, and NT$40.8 billion (US$1.24 billion) by backlight modules.
IEK-ITIS said that with the arrival of the peak buying season, major large-sized TFT-LCD panel suppliers in Taiwan are expected to continue enjoying revenue growth, averaging 10%, in the third quarter.
The shortage of small- and medium-sized TFT-LCD panels in the second quarter is expected to improve in the third quarter, when production value is forecast to increase 11% from the second quarter.
The third quarter's OLED production value is expected to show a 5% increase, after some local AM OLED makers win product certification from cellphone makers and begin shipments.
The TN/STN LCD sector is expected to record a marginal 0.6% growth in the third quarter.
Addressing different sectors of the FPD parts industry, IEK-ITIS predicted that color filter production will grow by 13% in the third quarter due to the high-season effect and an upturn in prices for TFT-LCD panels. Polarizer production is expected to grow by 8% thanks to increasing demand from panel makers. Glass substrate production is forecast to increase by 10% to meet the demand from growing panel shipments. The center also predicted that the value of backlight module production will increase 10.4% this quarter because these modules have become a growing part of notebook PC makers' supply chains. (Aug. 2007)
Caption: Large-sized TFT-LCD panels account for a major part of Taiwan's FPD production value. (photo courtesy of AU Optronics)
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